The Checkout

Top 10 Scams of 2006

With New Year's just around the corner, it's that time of year when we're inundated with all sorts of reviews and regurgitations of the year that is about to end.

I don't get much out of them except for the occasional "oh yeah" moment.

As in: "Oh yeah, it was this past year that Dick Cheney shot someone in the face."

Even though there are always plenty of scams, I have to say, I enjoyed in my own consumer news-nerdy sort of way Consumeraffairs.com's Top 10 Scams of 2006.

It helped that the Web site created a video countdown version that sounds like it was made by The Onion.

My personal favorites on the list:

* The Oprah scam: Targets of this deception received e-mails promising them tickets to tapings of Oprah's talk show after they "verified" certain financial information or wired money to a third party.

* The bogus fuel-saving devices: The Federal Trade Commission took action against a company for claiming its "magnetic device" would improve gas mileage. Another company hawked "special pellets" that, when added to your gas tank, would improve your gas mileage.

Other scams included:
* The craigslist scam, in which a phony renter sends a check to would-be landlords, asking them to deduct the rent and deposit and send back the difference.

* The grandparents scam, in which someone posing as a grandchild in distress asks for money.

* Pump-and-dump scams, in which a scammer encourages people to invest in a crappy stock that the scammer has already bought up and plans to dump as soon as his victims help boost the price

The list was rounded out by some old chestnuts such as phony job, phishing-vishing, and Nigerian 419 scams. (If you're interested in scamming scammers, you can look into scambaiting. Devised by British writer Michael Berry, you basically try to persuade a scammer you're rich and string them along.)

If some of these phony come-ons seem laughable, the not-so-funny truth, of course, is they work at least some of the time, or else scammers wouldn't keep trying.

In fact, 2006 was a record year for spam, according to online security firm Postini. That daily barrage of irritating messages now represents nearly 93 percent of all e-mail.

I'm sure next year's Top 10 will be totally different--and yet somehow completely the same.

What were your biggest consumer gripes and headaches for 2006? List your own Top 10 and post them here.

By Annys Shin |  December 11, 2006; 9:13 AM ET Consumer Alerts
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Comments

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I just got this link from my wife. Mostly common sense things but who locks their doors when fueling a car at the pump?

http://video.sheriff.org/psa_cartheft.shtml

Posted by: Non-debtor | December 11, 2006 9:48 AM

Thanks for running these lists. I am tired of talking to coworkers who wouldn't recognize a scam when it hit them. My favorite scam are the home-based businesses that will never work. I worked with a woman who paid money for a course in medical billing. I asked her, why wouldn't a doctor's office use one company like ADP for both their payroll and billing? And she stared at me before smacking herself in the forehead. Her husband, who had no experience as a contractor, helped set up a class at his church to certify himself and others as home inspectors. Then found out there isn't enough work for home inspectors to go around without extreme connections in the real estate or builders world and CERTAINLY not enough for a dozen to belong to the same church in the same neighborhood. He inspected my home as a test and missed roof damage that I was having repaired AND that I already told his wife I was having repaired!

Posted by: Bethesdan | December 11, 2006 9:50 AM

How about those $500 42" HDTV's that pop up on Amazon.com? I had fun with one of the fraudsters. They simply wanted me to wire $500 to Verona, Italy, and presto!, the tv would arrive. Curious that they would only accept a Western Union payment-must make it like instant cash and untraceable. Wonder how many people fell for this. And shame on Amazon, too...

Posted by: Robert D. | December 11, 2006 9:58 AM

Lets not forget about the big cable/telephone/internet businesses that scam people out of money by overcharging them, or not delivering good service, making you spend hours and hours of your time trying to correct their error or problem only to get put off.

Posted by: Chris | December 11, 2006 10:04 AM

This may not be a scam - I think it's more of a loophole, but it's a frightening one. I wrote a check (a physical, paper, signed check) to my local grocery store, and when it was electronically presented to my bank, the amount had been changed to add a $35 "check processing fee". When I frantically called my bank to tell them that I'd written a different check than the one that was presented, the bank manager told me that the only recourse I had was to file a fraud/altered check report, since when a business electronically presents a check to a bank, they don't have to use the check number, the check amount, prove the signature, or anything else relied upon by paper-check users. All they need is the check showing the routing number and account number, and they can put any amount they please - it's up to the customer to catch the problem (by the way, the grocery, a PA-based chain, claimed that the extra fee was to compensate them for taking paper checks, and that by writing them a paper check for my purchase, I agreed to the fee)

Is this a new change in the banking laws? Do merchants actually have the right to change your amount of purchase before they enter your check for processing if they use the electronic method? I always thought writing a paper check was safer than using the bank card, since it had a check number, an amount and a signature (and I have had my bank card misused by a merchant in the past). I think carrying cash may be the safest option now.

Posted by: KTB | December 11, 2006 10:16 AM

KTB - That certainly appears to be fraud and you should report it as such. You should also contact the Federal Trade Commission and the local Attorney General.

Posted by: G | December 11, 2006 11:06 AM

Top 10 biggest Grips and Concerns of 2006:

10: Home-based business commercials. Most likely you will waste your money on a business that almost never works.

9: Earn $75 for giving out free satellite dish certificates. The catch is the person who receives the certificate has to try the system before they give you $75. They make no mention of this in their ads.

8: Ad for work-at-home businesses that virtually turn your computer into a member of a Botnet for the purposes of sending out ads to other people.

7: A service that offers sales leads. How do they know my demographic?

6: Satellite radios that promise wireless service access. They make no mention of the line-of-site requirement

5: Loose weight while you sleep. This is absurd.

4: Loose 30 pounds in 30 day. Yeah, cut off a leg

3: Customer services with big companies. The bigger they are, the less they care.

2: Tax cuts

1: Oil companies record profits.

Posted by: Radioactive Sushi | December 11, 2006 11:13 AM

The scam about your ATM PIN entered backwards is a distress signal and alerts the police, who will come roaring in with lights and sirens to rescue you. Yeah, sure. Don't fall for that -- it doesn't work.

Posted by: Southern Maryland | December 11, 2006 11:24 AM

My first paycheck with a new company went through the bank with no signature. It was a paper check and I presented it to the teller with a deposit slip. It was for several thousand, yet the teller paid no attention to the fact that it was unsigned. It was an accident that it hadn't been signed, but it freaked out our payroll clerk because she had meant to get the signature and then give me the check and forgot. This makes me very wary of our whole banking system, which is basically totally automated. So much that a missing signature never triggered a question.

Posted by: Marlene | December 11, 2006 11:40 AM

Italy and London, England are also major sources of these scams. The large populations of immigrants may be a factor. These scam artists hurt their own nations by making it more difficult for legitimate business transactions.

Posted by: thw2001 | December 11, 2006 11:47 AM

Complain to your state attorney general. That is highway robbery. I am sure there must be some required disclosure.

Posted by: BD | December 11, 2006 12:06 PM

Thanks for the responses! I reported the transaction as fraudulent to my bank. The Fraud report has a question about if I had notified the police, so in that line I put, "Bank officer told me that it was a legal transaction". The store in question is Weis Markets and I spoke with both the store manager and the corporate customer service representative. Both told me that I agreed to pay their "check writing fee" by writing a check and that I should have noticed the signs at the register. The check was for $56 and was presented for $91 electronically. It went through (did not bounce) despite the changed amount.

There's another part to this - the check was written to Weis markets but presented by a third party, their "check service" called CheckFast. The bookkeeper at the local store told me that she never even saw the check, that all checks went straight to the CheckFast service. However she verified that CheckFast would add the $35 fee. The Manager told me that the store had a storewide orientation from CheckFast about taking over their check transactions and that they knew that the checks would have the $35 fee added and that the sign at the register was sufficient notice. The corporate Customer Service person told me that they thought CheckFast was supposed to enter the $35 fee separately instead of just changing the check amount. She also told me that the check was supposed to bounce first before being sent to CheckFast. The transaction, as she understood it, was that when a check was returned the first time, instead of the store redepositing the check, Checkfast redeposited the check and then took an extra $35 fee from the customer's account. She didn't believe me when I told her my check did not bounce, but she did get disturbed when I told her that my account didn't get a second fee charged, that the check itself was re-written electronically to show the enhanced amount. After that conversation, I sent a letter to Weis corporate office explaining that CheckFast re-wrote my check to add in their fee (and that the check did not bounce).

But the above statement about Checkfast being allowed to take another fee using the customer's checking account set off even more alarm bells. A third party is allowed to write their own check to my checking account because I wrote a check to a merchant? I asked the bank if this was legal and the bank officer said it was, although it used to be illegal, but now the laws have changed. I can't find it announced anywhere that the electronic transactions law allows third parties to copy off the check routing and account number to make their own dip into my account, but maybe it's in the fine print somewhere?

Posted by: KTB | December 11, 2006 1:12 PM

"(If you're interested in scamming scammers, you can look into scambaiting. Devised by British writer Michael Berry, you basically try to persuade a scammer you're rich and string them along.)"

Bad, bad, bad idea. These people are criminals. Ignore it, but don't invite trouble.

Posted by: Noam Sane | December 11, 2006 1:28 PM

A better question for Marlene is why she decided to go ahead and deposit it anyways, knowing that only signed checks are valid (I assume). It isn't only up to the banks and financial institutions to stop fraud. It also falls ultimately on the consumer's shoulders to decide between doing the ethical thing and doing the easy thing.

So much fraud could be stopped if we only took that small step ourselves. One example: credit card receipts. When I see one on the ground that someone dropped, I often pick it up, crumple it up and toss it in the trash can. If it has a full number, I'll take it home and shred it. What do most people do? Look the other way, leaving it out for some criminal to exploit. Same goes for misdelivered mail...does everyone walk it to the secure blue box or hand it to the neighbor in person, or do you toss it or pin it up nearby, where anyone can snatch it because, ultimately, "it's not my problem"?

Anyways, my point is there are things that we do every day that contribute to the ease with with fraud is committed, and knowingly presenting an unsigned check should be on that list. What's funny, the same thing happened to my roommate. He got his first paycheck, and it was unsigned by payroll, but instead of cashing it, he took it back the next day and got it signed.

As far as scams, the Canadian Diamond Trading Company is a pyramid scheme that has been victimizing the local deaf community recently, using deaf to recruit deaf, and as anyone who knows the deaf community can attest, the level of trust in someone who is deaf and uses sign is almost unquestioned initially. So the level of naivite in the community is astounding, and using deaf to cull the money of other deaf is especially disturbing.

In all, I visit scam squishing websites like snopes.com, breakthechain.org, and hoaxbusters.ciac.org to sniff out legit mail from the fluff.

Posted by: CyanSquirrel | December 11, 2006 1:28 PM

KTB,
Sounds like someone either at that WEIS market or at CheckFast is skimming from the top, so to speak. Those kinds of services are only used when an initial check has bounced, as I understand it. If you did not bounce a check there, and especially not for this transaction, the reason why that store sent it to the processing service to begin with should be suspect. Boy would I like to be an auditor of their books! (Evil laugh)

Posted by: CyanSquirrel | December 11, 2006 1:35 PM

Banks & Financials have been discouraging checks for years. It costs them more money to process than electronic. They will be history in the near future. (After that, cash will be the next target.) Once we are all required to use electronic commerce because no business will accept anything else, there will be no further recourse for consumers from being financially raped one dollar, or 35, per transaction.

Posted by: KD | December 11, 2006 1:51 PM

Actually, KTB, the more facts you reveal about the transaction, the less it looks like fraud. If there are signs posted at the check-out clearly stating that there is a $35 charge for processing payments made by check (as I suspect there are, even if you didn't see them), then you're pretty much out of luck. When you offered the check as payment with constructive knowledge of the fact that the check would be processed electronically and that there would be a $35 charge, you effectively consented to the electronic withdrawal of the additional $35 for the processing fee. It happens all the time when you try to use "pay-by-check" over the phone -- the only difference is that you actually hear the telephone voice telling you about the additional charge rather than having to rely on your own powers of observation to make sure you see the sign at the register and you read it accurately.

Yes, not fair (and a bad business practice), but not fraudulent, either. YOu would think that in the name of customer service, Weis Markets would at least train its cashiers to parrot the warning every time someone tried to pay by check. And, for the record, they didn't "re-write" your check for a different amount -- they presented it electronically for an amount that included the face value of the check plus the processing fee.

Posted by: Voice of Reason | December 11, 2006 2:21 PM

I would think that if there is a fee involved, the store would/ought to have to ask one of two things: 1) either write a second check for the $35 right then and there or 2) include the $35 in the total transaction amount. Either way makes it clear there is a check fee and a customer can decline that method of payment. With the plethora of advertising, impulse sale displays and other distractions at the register, placing a sign there without some backup to ensure people are comletely aware of the charge before they present the check is negligent at best. To change the amount the check is being presented for after it leaves the hands of the customer is downright unacceptable and open to abuse. If the fee is so legit, why is the store's practice for having clear checks and balances (no pun intended) so shoddy? I write a check, and I expect it to be presented for the amount I write it for, and NO ADDITIONS, without someone CALLING me or notifying me of the change before it is processed so I have the right to set who can and cannot touch MY money and for what reasons.

I feel for KTB. Sounds like the banking industry needs to be paddled.

Posted by: CyanSquirrel | December 11, 2006 2:33 PM

No, it sounds like KTB's situation really WAS fraud. It's likely the "sign" was a notice saying there'd be a $35 charge for bounced checks. I see signs like that in every grocery store. If the check didn't bounce and the charge was imposed anyway, it certainly is fraud.

Posted by: WM | December 11, 2006 3:03 PM

Thank you all for the responses and advice. I spoke with a CPA that used to be a bank controller, and he was absolutely flattened at the concept of the re-written check being legal, and of the concept of a third-party use of my checking account - whether or not the initial check bounced. The bounce issue seemed to be the sticking point for Weis, but while corporate insisted that the check "must" have bounced for me to get the fee charged, the local store just told me it was their "check fee" and that I auto-accepted the $35 fee when I wrote the check to them. I don't think the check-fee policy is going to be good for sales, but maybe I'm an ancient anomaly nowadays for even wanting to use paper checks, and they'd rather not have people like me shop there if we're going to be that old-fashioned.

The CPA suggested that I write my congressperson and senator instead of the state AG, since electronic banking is controlled by federal instead of state law (it is?)

Anyway, now I'm really afraid to write a check to any person or merchant I don't know personally. Seems to me that now check information is in the same category as credit card numbers - anonymous and easily used, hidden (outrageous) fees, and all. If the bank doesn't care about signature, check numbers, or amounts, and a checking account is simply another type of number that allows money to be siphoned out by whomever, what use are they? I thought new technology, with fingerprint and retina-scan ID, was supposed to help protect the money in people's bank accounts from being stolen. Who or what protects it from the electronic banking system?

Posted by: KTB | December 11, 2006 3:12 PM

re: KTB
$35 to write a check? That's criminal, unethical, and VERY anti-consumer. Even the cell phone and cable companies only want about $2 for an operator assisted check over the phone.

If it is a bounced check fee, as was mentioned by several others, that seems like a high amount, but the signs should be posted.

Posted by: blasher | December 11, 2006 3:18 PM

Voice of Reason, the check actually was re-written - using the same check number and copying the face transaction name - not just submitted as an electronic transaction. It's highly possible that I, along with many other older people, missed any fine print in the counter's notification saying that the check fee was not just for returned checks, since small print is difficult for me to read and I ignore it if I don't think it applies to me. I had written checks at that Weis for my groceries the past eight months without any trouble (or fees) so it did not occur to me that I needed to review the new counter notices. And as I mentioned in my first post, this whole thing may very well be legal and legit, and it's up to the consumer to "catch" merchants that re-write check amounts before being submitted to the bank. Obviously, if the amount had been charged on my receipt, or placed for my signature like a credit card transaction receipt, I would have switched payment method - but I wrote and signed a physical check for the amount of my purchase, and the check sent to my bank had the same number and routing information - same everything - except the amount had been "enhanced". 20 years ago, that was criminal fraud. Nowadays, I guess it's "buyer beware"!

Posted by: KTB | December 11, 2006 3:25 PM

Dear Ms. WashingtonPostWriterandJournalist Shin:

I represent the Nigerian estate of the late Mr. Joseph Pulitzer and you have recommended most forcefully and faithfully to me as a journalist of the utmost of integrity. Mr. Pulitzer's estate in here the capital of Nigeria, that is Lagos, is in need of a US journalist to allow the extreme funds, that is, 25 million dollars CSA, signed by Pres. J Davis himself, to be repatriated the United States of America. Nigerian law only allows registered US journalists to repatriate the monies of the estates of journalists, so this is why I ask for your help. We will pay you one quarter (ie., 20 percent) of the gross amount of the estate should you assist us in carrying out the last will and testament of Mr. Pulitzer in repatriating these funds to the USA to endow a trust for the benefit of journalists. For this, we are prepared to pay you 10 percent of the Estate, that is, 250,000 dollars CSA. In order to carry out these steps, we ask that you deposit with us 1 percent of this amount, that is, 2500 dollars. Please wire these funds to us so we may wire you the 25 million dollars, at which point you may deduct your fees. The Estate also will award you a Pulitzer Prize for Assistance to Journalism and endow a chair in your name at the Columbia School of Broadcast Journalism.

Your most truly,

John Ashcroft, QC
Slip, Trip and Skip
Barristers and Soliciters at Law
Lagos, Fed. Rep. Nigeria

Posted by: Garak | December 11, 2006 3:40 PM

"A better question for Marlene is why she decided to go ahead and deposit it."

I didn't make this clear in my message. I did not notice that it was unsigned, the payroll clerk mentioned it to me after I'd deposited it. I never looked for a signature, assumed it was signed, and apparently so did the bank clerk.

Posted by: Marlene | December 11, 2006 3:50 PM

"...knowing that only signed checks are valid (I assume)."

And unsigned checks apparently ARE valid once they enter the banking system. Our payroll clerk was waiting for there to be some question from the bank, but then the original came back, unsigned, and the transaction went through without a hitch.

Posted by: Marlene | December 11, 2006 3:54 PM

So finally, Voice of Reason, I didn't do the easy and unethical thing. If I had noticed there was so signature, I'd have just walked the check over to the payroll clerk, which would have been far *easier* than driving to the bank and then having it handed back to me because it was unsigned. Your post made a lot of assumptions and those you made about my character were unnecessary.

Posted by: Marlene | December 11, 2006 3:59 PM

And now that I've written those three posts above, I realize I should have been responding to CyanSquirrel, who always seems to post about how smarter he/she is than everyone else. (I've seen posts on other WP blogs.) You're not the only person in the world who knows about Snopes.com, CyanSquirrel.

My apologies, VoiceofReason.

Posted by: Marlene | December 11, 2006 4:03 PM

Almost anything to do with real estate and home improvements are a scam. The realtors aren't only selling 'location, location, location' they are licking their lips and muttering 'commission, commission, commission.' I bought a house and paid an inspection service (recommended by the realtor, no less) to inspect it before purchase. They missed a very obvious defect in the roof. Not being an engineer, I didn't notice the defect myself but the inspection service was supposed to be a 'professional' service. After a wall started collapsing a couple years later, I discovered the seller built half the house himself WITHOUT GETTING A BUILDING PERMIT FROM THE COUNTY! I checked County permits and licenses, and even the tax assessment office. The footprint of the house a year before I bought it was different from the house I bought so the construction was made just before I bought it without the County's knowledge. Of course this was all too late to do any good. The state real estate commission couldn't help, so it's OK for realtors to sell illegally built houses. The State Attorney General couldn't help. There is no consumer complaint department where I live. The Better Business Bureau couldn't help. The seller's realtor didn't care but now she markets herself as a 'luxury home expert.' So -- if you buy a house, have at least 2 or 3 inspections and question every single item they inspect. The home inspection service got off the hook because the owner of the business when I hired them sold his business to some other schmuck who denied any involvement. Sign me SCREWED.

Posted by: Southern Maryland again | December 11, 2006 4:17 PM

www.tuesdayswithmantu.com

Posted by: rich siegel | December 11, 2006 6:45 PM

Ok Marlene, who put the stick up your behind? I didn't say one word about YOUR character. I said it is true of people in general when given a choice that they take the easy road. I also pointed out that I was assuming some info since, as you admit, you didn't disclose not noticing the signature. Thank you for clarifying. And thank you for pointing out the fact that a signature makes no difference once the check is in the system...that's interesting and scary. Finally, thank you for saying, in effect, that I think I'm a smarty pants and better than everyone else. Funny, I thought that was nondebtor who had that attitude, but ok, lump me in there too if it makes you feel better. I can't ever recall posting anything where I didn't raise a legitimate point. Your story had a good point about the responsibility WE hold to reduce and minimize fraud, but if you want to make it a personal issue and label me explicitly for some ego-soothing reason, go for it. I stand by my points.

Posted by: CyanSquirrel | December 11, 2006 10:32 PM

And what the heck warrants your snotty comment that I'm "not the only one who knows about snopes.com"? I was answering the original post's points, noting my method of protecting myself from scams and urban legends, and that had nothing to do with you, Marlene. In retrospect, had I known what I know now, I wouldn't have included my roommate's experience. That did give off the air that I was making moral judgments about you when in fact I wasn't. I should have clarified that I noted that because of the timing. It just recently happened so it was interesting to see a parallel experience on the blog and what might have happened had he went ahead and tried to make a deposit. I'm sorry it sounded like I was judging you. Thank you.

Posted by: CyanSquirrel | December 11, 2006 10:47 PM

To KBT:

I am not really sure that forgery can be called legal even if the banking system has the politicians in their pocket. However, I would recommend you try the following:

Step 1: Contact your local Weis Markets store and let them know how much you spend on a weekly/monthly basis.

Step 2: Advise them that you will refrain from supporting their business until 10 times the amount in question has been spent with their competition.

Step 3: Insist on a refund of your $35 immediately.

As the person with the money that they so obviously want, you have more power over their business processes than you realize.

Who knows ... the Weis Markets competition may satisfy your needs to the point that you no longer need to support Weis Markets.

You win ... they lose.

Posted by: VOR | December 12, 2006 12:38 PM

thescambaiter.com is a good place to start to get educated on all scams. and how you can waste these scammers time.. and divert them away from REAL victims. you can find many ways to deal with these scammers. auction scammers and 419 advanced fee fraud scammers. among others

Posted by: keys | December 13, 2006 6:40 PM

To KBT:
Legal or not, this is an outrage, and you shouldn't take it lying down. Write a letter to your local newspaper, or get a journalist to do a story. A local TV station would be even better. Don't slander, just tell the truth. Let it be known that you are boycotting Weis as punishment for this behavior, and you would like others to do the same. Get your politicians involved. Regardless of party, they LOVE this kind of publicity -- watching out for "the little guy" and all that.

I think you'll get your $35 back, with a profuse apology.

Posted by: dmm | December 20, 2006 2:48 PM

My biggest consumer gripes and headaches for 2006:

More and more products appear to be PURPOSELY designed to break, and to do so in an unfixable manner. Forced consumerism.

Along those same lines, anything made with Chinese steel. (For example: I snapped the arm off of a pair of pliers WITH ONE HAND, and I'm not even strong.)

Slightly-potholed roads completely torn up and repaved, while massively-potholed roads are patched (badly).

Continued massive federal bail-outs of areas that are well-known to be prone to hurricanes, or wildfires, or floods, or whatever. (If these people can't buy insurance, shouldn't that tell you something? Why are safe areas forced to subsidize risky areas?)

High real estate taxes to support a public school system that I don't send my kids to, and that does a lousy job educating my neighbors' kids. (Stop blaming the teachers, and stop blaming lack of funding. Change the system to one that works.)

Toll booths that are closed on a holiday weekend, because the toll-takers took off, resulting in massive backups. (There oughta be a law: once the backup reaches one-half mile, nobody pays. You can bet toll-takers wouldn't take holidays on holidays anymore.)

Countries that accuse us of being "foreign occupiers." I want national referendums in the "occupied" countries. If they say, "go," we go, no questions asked and no delay, and whatever happens after we leave is on their own heads. If they say, "stay," we stay, but then no more talk about us being foreign occupiers.

Posted by: dmm | December 20, 2006 3:40 PM

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