Top scams - and how to avoid them

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In the world of scams, the latest trend is an increase in fake letters claiming to come from the Ministry of Justice. The letters state that the recipient has been identified as being a victim of protection insurance mis-selling, including payment protection insurance (PPI) - if they pass on their account details so a small administration fee can be levied, they are told they will receive a lump sum.

It's often the poorest and indebted, those struggling to pay their bills, who are targeted by fraudsters. But don't fall for these scams! Read on to find out what the most common ones are and how to avoid being scammed.
Scams Awareness Month
But it's Scams Awareness Month and consumers are being asked to speak up against con artists to the authorities. The Trading Standards Institute, Citizens Advice and Action Fraud have teamed up to encourage consumers to shop fraudsters. Anyone who receives a potentially fraudulent email or letter can take a copy to one of the numerous local libraries that are supporting the stop scams campaign.
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Justice Minister Jonathan Djanogly said: "These are callous fraudsters who target people they believe are vulnerable to scams, often seeking out those who might already be struggling with debt. I would urge the public to be on their guard and not to hand over any money until completely confident a company is legitimate, and to contact the authorities immediately if they are concerned."

Top scams
The top scams include lottery scams, which can go under the name of genuine lotteries like the UK National Lottery. People are told they have been entered into a prize draw before being congratulated on winning a prize. But before they can claim it they are told to pay for administration fees and taxes for the prize, which, naturally, doesn't exist. Please note that no genuine lottery will ask for money to pay fees.

With phishing, you will receive an email that appears to be from a real bank or credit card company, with links to a website and a request to update your account information. But the website and email are both fake and the fraudsters will use your account details to siphon off money.

Work-at-home scams ask for money upfront for materials but once you've paid up you won't hear anything back. Investment scams invite you to invest in property or a business that doesn't exist or has little chance of success.

The 419 foreign money transfer scam has been around for well over a decade and got its name from the relevant part of the Nigerian penal code violated by this scam. Although these scams are associated with Nigeria, scammers also operate from other African nations and from European cities with a large Nigerian population, notably London and Amsterdam.

This scam often revolves around some major event, such as the overthrow of a government, which, it is claimed, has resulted in large sums of money being held in a foreign country. The scammer claims to need help in transferring the cash to another country. A portion of the money is offered for help in arranging the transfer.

Often you will receive a scam etter, fax or email from someone who says they need help in transferring money overseas, in many cases as much as $20-30 million. One of the most prominent victims of the 419 foreign money scam was Joseph Raca, the former mayor of Northampton.

In 2001, Raca received a letter from an 'official' South African government source and was asked for his help to transfer funds out of the country. He entered into correspondence with the scam artists and flew to Johannesburg to 'complete' the deal, but was kidnapped at the airport. A ransom of £20,000 was demanded from his wife but the police managed to track down the kidnappers and he was released.

Billions of pounds lost to con artists
It is estimated that fraud costs people more than £73 billion a year. However, most people don't report this crime, largely because they are embarrassed to have been targeted by the criminals.

Peter Wilson, director of Action Fraud, said: "Whether you've lost money or not, we want to know what's happened. All information is good information when it comes to tracking down those responsible for the network of scams that continue to plague people, particularly the elderly, daily."

Here is some advice from experts at consumer organisation Which?. It has a whole section on how to beat identity fraud.

How to spot a scam
  • Be suspicious if you receive any unsolicited emails or phone calls. Stop and think before responding to any unsolicited correspondence. If something seems too good to be true, it probably is.
  • Consider why you may have received the correspondence or call, and whether it is likely that you are just one of several hundreds of people to be approached.
  • Remember that if you give your financial details to a third party you could lose a considerable sum of money. Never reveal your bank and personal details to strangers.
  • Don't ever reply to requests to help strangers transfer money out of a foreign country. It's a long-running scam and the money never exists. The scammers have not targeted you personally. Every day thousands of these scam letters and emails are sent to people across the globe.
  • If you receive one of these scams via email, report it to the internet service provider (ISP) that was used to send you the email. For example, if the email came from a Yahoo! account, send it to abuse@yahoo.com. The ISP can then close the account which sent the email.
  • If you are unsure about the validity of any contact from what seems to be a legitimate company or authority contact them using the official number as found on their website or in directories. Do not click through to links or call phone numbers shown in the suspect correspondence. These are likely to be fake, too.

Whom to contact
Anyone who has received a fraudulent email, phone call or letter which appears to be promising repayments for PPI, cash prizes for lotteries and prize draws in return for the payment of an advance fee should contact Action Fraud (0300123 2040) or Citizens Advice (08454 040506).

If you have received a scam letter or email, you can also contact Dan Moore at Which? at dan.moore@which.co.uk.

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