Penny auctions and gold buying schemes are among the latest scams the public should avoid, according to Lynda Pasacreta, president and CEO of the Better Business Bureau serving mainland B.C.
On Wednesday, the BBB, in conjunction with Consumer Protection B.C. and the B.C. Crime Prevention Association, released a top 10 list of scams to look out for in 2012.
Penny auctions are online ads, often designed to look like news reports, which appear on popular websites and claim people can get great deals on iPads or other electronics. Typically, users must set up an account and purchase bids with a credit or debit card. Each individual bid may cost less than $1 and are often sold in bundles of 100 or more. Every item has a countdown clock and as people bid, the cost of the item goes up incrementally and more time is added to the clock. Even if you dont win the item, you still have to pay for the bids you placed, which can add up over time.
Gold buying schemes take advantage of tough times. The average price of gold was $18.93 per ounce in 1912 when the BBB was created. In 2011, the price soared, averaging more than $1,735 an ounce. A strained economy and high demand for gold resulted in many consumers selling, trading and receiving unfair returns when cashing in their gold and jewelry, according to the BBB.
Penny auctions and gold buying schemes are more a result of the economy in the States and its just moved up here into Canada, Pasacreta told the Courier. We were very well aware this was coming, but its just been rampant in the States because of people looking for ways to buy things cheaply and a way to get some extra cash in the household.
Brand spoofing, also known as phishing, is another troublesome scam. Criminals fabricate emails, texts or websites to look like trusted businesses, financial institutions or government agencies and collect personal or financial information.
Advance fee loan advertisements, meanwhile, guarantee loans to people, typically online, but after the money is received, the loan isnt handed over.
Power-saving claims have emerged with B.C.s switch to smart meters. Its led to a rise in false claims and deceptive ads by scammers selling energy conservation devices that dont work or dont meet electrical safety requirements.
Door-to-door salespeople who use unscrupulous, high pressure sales tactics to frighten people into buying expensive, substandard, and often unneeded, products and services also made the top 10 list, as did virus-fixing schemes. The latter involves a caller fraudulently claiming they work for a well-known computer company. They warn the homeowner of a virus on their computer, which will ruin their computer if it isnt addressed. The victim is told to download a program from a website, plus pay a fee for a subscription to a preventative service. But there was never anything wrong with the computer and damaging malware and spyware has been downloaded.
Fraudulent locksmiths, anti-social networks and financial elder abuse finish off the top 10 scams.
Seniors, Pasacreta said, are particularly vulnerable to scams and thats where she sees the really nasty stuff. Criminals target seniors with dementia, the very elderly, and those who cant hear or see properly.
[Seniors] come from a different era where theyre not wanting to be rude to somebody thats on the phonea lot of times they give up and give their credit card information just because they want to get them off the phone, she said.
Even Pasacreta has fallen victim to fraud. She recalled being targeted by a dial 9 scam in the 1990s.
I worked at a company and I got the Youve won a vacation dial 9 scam at the business where I worked. I opened up a lovely long distance line to Peru, so there were a whole bunch of long distance charges for that on my line. Ive definitely been caught up.