As we ease into the New Year, the Better Business Bureau of Minnesota and North Dakota (BBB) is taking time to look back at the Top Ten scams of the past year. The list is an informal one compiled by BBB staff and weighs scams by how widespread they were and the effect they had in the Minnesota and North Dakota marketplace.
“2012 continued to be a big year for ‘classic scams’ such as bogus timeshare resellers or asphalt scams, where companies knock on doors claiming to have excess materials from other jobs,” said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. “However, we also saw the emergence of a highly malicious text scam and a utility scam that had many consumers mistakenly believing the government would be paying their utility bills.”
In no particular order, the Top Ten scams of 2012 according to the BBB were:
- Phony debt collectors telling consumers they faced arrest if they didn’t make an immediate payment on bills they may or may not have owed. Under the Federal Debt Collection Practices Act, debt collectors cannot threaten people with arrest.
- A text scam in January which resulted in a $10 charge – per text – on the cellphone bills of people who received the unsolicited messages, regardless of whether or not they opened or responded to these messages.
- Sweepstakes scams. Consumers continued to be victimized by emails, texts or letters informing them that they had won sweepstakes. Unfortunately, these were only ploys to get people to pay – supposedly for taxes or insurance purposes – fees to collect non-existent prizes. Remember, if you’re told you have to pay or wire money to collect a prize, you haven’t won anything.
- Deed Scams. Consumers receive official-looking notices which look like bills for a copy of their property deed. The BBB reminds consumers they generally don’t need copies of their deed, and also that companies who send out these mailings charge homeowners more than 40 times the price they would pay if they were to purchase the same copies themselves at their county offices.
- Bogus timeshare resellers. In 2012, the BBB identified four entities claiming Minneapolis and St. Paul addresses, all purporting to be resellers of timeshare properties. However, a closer review of these companies revealed they were not located here and none of them were legitimate organizations. Complaints regarding timeshare resellers often involve situations where people were told they only needed to wire “escrow funds,” or that they just had to pay taxes or closing costs and their timeshares would be sold. Never wire money to someone you don’t know.
- Asphalt Scams. Traveling crews go door to door claiming they have extra asphalt from a nearby project and they’re willing to work at a discounted rate. However, the quality of work is often sub-par and the final cost can sometimes be double – or many times – the quoted price.
- Utility Scam. In early July, our area was hit by a nationwide scam which claimed the government would pay people’s utility bills through a new federal program. Through social media, customers shared a fraudulent bank routing number that would supposedly pay their utility bills via automated telephone payment services. The payments were initially accepted but later declined after the bank account number proved to be phony.
- Romance Scams. Scammers use dating sites, chat rooms and social networking sites to woo singles and eventually convince them to hand over money. The BBB advises people to try to meet someone locally, as there’s a far higher risk of running into a long-distance scammer when your only contact with the suitor is online.
- Ransomware. A tricky new computer virus that delivered pop-up messages to infected machines which claimed to be from the FBI and threatened people with a fine or prison unless they paid a fee to have their computer unlocked. The BBB advised affected consumers to pay an expert to fix their computers – not the scammers – and urged all computer users to make sure their computer had the most recent updates installed for spam filters, anti-virus and anti-spyware software, as well as a secure firewall.
- Power4Home Pro. A company which claims a Minnesota address (however it’s a UPS Store) and also claims on their website they can teach people how to “slash their power bill or eliminate it completely.” The company has an F rating with the BBB due to unanswered complaints and a pattern of complaints alleging incomplete orders or non-shipment of training materials. The company also failed to provide the BBB with substantiation of savings claims made on their website.