The 3 hottest scams
We've done some research and come up
with three of the hottest scams being used by crooks out to get
your money. Of course, there are tons of variations to each of these,
so we gave you examples of what some of them might look like. So
without further ado, here are the best of the worst as described
National Consumers League, an advocacy group representing consumers
on marketplace and workplace issues that is located in Washington,
Recently, more than 17,000 Floridians were conned
by a typical pyramid scheme. In the Florida scam, investors were
required to pay $200 for a "distributorship" entitling them to receive
items from various catalogs -- but only after they had sold an additional
50 distributorships to people they recruited. The initial $200 would
sit in a "layaway account" and the purchase would not be concluded
until the 50 additional distributorships were sold.
The initial participant would then receive a recruiting
bonus of $2,000 or more, depending on the number of distributorships
sold. However, the money from the "layaway accounts" was in fact
used to pay recruitment bonuses to other participants. If profits
come from memberships instead of bona fide sales, it is a sure sign
that you're getting ripped off.
The Iowa Securities Bureau recently took action against
a company whhich sold an unregistered business opportunity that
involved the sale of breeding snails for snail ranching. According
to the company's sales literature,"Helliculture (snail ranching)
has become one of the newest and fastest growing business fields
in the United States," a financially rewarding experience" for housewives,
retired people, the unemployed, or business people." Advantages
are that "snails are easy to breed, easy to handle and multiply
rapidly." Talk about your slow-to-develop scams.
According to a Federal
Trade Commission complaint, a Washington-based company claimed
investors could earn $15,000 a month by becoming "Internet Consultants."
The company and their principals charged a $3,195 fee for "in depth"
training that would allegedly allow consumers to design World Wide
Web pages for businesses that could advertise in their "World Virtual
For their investment, consumers received a "training
workshop" that provided no real training and a booklet containing
basic Internet information readily available from public sources.
When a company is promising these types of returns, you'd better
be careful. Investors should always remember these wise words --
When in doubt, check it out!
What's a con artist's favorite song? Probably, "Take
the Money and Run" by the Steve Miller Band because that's what
they plan to do with your moolah. Once they've got their
hands on your dough, trying to catch them can be harder than keeping
up with O.J. on an airport run.
Posted: May 19, 1998