Notes On Consumer Affairs
Scams that prey on consumers are nothing new. In today’s tough economy, it is more important than ever to maintain constant vigilance and to be aware of what some of the latest scams are and how they work.
One timely scam involves disaster relief efforts. With the recent earthquake in Haiti, many consumers would like to send aid. However, you want to be sure that your donation is actually going to help those you intend it to. One way to ensure this is to give to established charities that you are familiar with while being cautious of ones that appear to have been created solely in response to a particular tragedy. If a person or organization is soliciting you for a donation, do not be afraid to ask for specific information about where your money will go; some charities hire outside companies to fundraise for them, and then use a portion of your donation to pay for the fundraising. Be leery of charities that request you donate in cash or that offer to send a courier to collect your donation.
Some fraudsters will offer to enter you into a sweepstakes in exchange for your donation; under federal law, you do not have to make a donation to be entered into a sweepstakes.
Another common scam involves acai berries. In recent years, these have been marketed as having a variety of miraculous health benefits, including that they prevent the H1N1 flu by boosting your immune system and help consumers lose weight. These ads often falsely claim that celebrities such as Rachael Ray and Oprah Winfrey have endorsed the berries. While acai berries do contain nutrients and antioxidants, the Food and Drug Administration has not determined that they lead to weight loss or prevent the spread of the flu and has taken action against marketers that make such claims.
In addition to making questionable claims, some companies that market acai berries also purport to offer free trials. However, these trials often are anything but free. Consumers have reported being billed before their trial ended, continuing to be billed after they told the company they wanted to cancel, and receiving charges for products they did not order. Once these charges are on your credit card, it can be very difficult to remove them. The Better Business Bureau has received thousands of complaints about companies that sell acai berries.
A third scam involves checks. In this scam, the consumer receives a check, often for thousands of dollars, from a third party. Sometimes the check arrives in the mail unexpectedly, but often the consumer has responded to a newspaper ad or spam e-mail looking for a secret shopper. The consumer is instructed to deposit the check into his or her bank account and then promptly send the money via a money transfer service back to the third party. The consumer is told to keep a small amount of the money as payment and to mail the third party an evaluation of the money transfer service.
As a consumer, you should be cautious. Many of these checks are fraudulent, but because it takes banks ten to fourteen business days to process checks, well after the funds are available, the money has already been wired and the consumer is out thousands of dollars.
Legitimate companies that hire secret shoppers usually do not advertise in the newspaper and never use spam e-mail. In addition, in order to put you on payroll, companies need your Social Security number and you have to sign a W-4, a federal tax document required by the Internal Revenue Service. Many of these secret shopper scams do not take these steps, a sure sign that the job is a scam. Legitimate employers will never ask you to use your own bank account to conduct business. If you are suspicious of a check, ask your bank to examine it before making the deposit and confirm with the bank that the check has cleared before sending any money. If you believe you have become the victim of this scam, contact your local law enforcement agency.
If you would like to check on the legitimacy of a charity or company, there are several resources available to help you. You can contact the New York State Attorney General at 1-800-771- 7755, www.oag.state.ny.us, and http:// www.charitiesnys.com; the Federal Trade Commission (FTC), which can be reached at 1-877-FTC-HELP and http:// www.ftc.gov; and the Better Business Bureau (BBB), which can be reached at (212) 533-6200 and http:// www.bbb. org/us.