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Tricks - don't get caught out! Beware of Fraud & Deception

What do you do if you receive an unsolicited phone call or letter telling you that you have been entered into a prize draw? If you respond you could be on your way to losing thousands of pounds. This leaflet will warn you about scams. Scams are tricks to steal money from you."

There are many different kinds of scams, from miracle lotions to bogus prize draws - the more you know about them, the less likely you are to fall for them.

Tricks - pyramid schemes

Pyramid schemes promise you money in return for the number of people you are able to recruit to pay to join the scheme.

The claims about the money you are likely to make are misleading. Because it is only possible to earn money by recruiting others into the scheme, those near the bottom of the pyramid always find that it is not possible to make the advertised return on their investment.

There are simply not enough people to support a pyramid scheme indefinitely. As a result, it is usually only those people who set up the scheme who are able to make any money.

No new money is created in pyramid schemes. Investors who join early take their profits from those who join later. At some point, no new investors can be found and as a result the last investors, who are at the bottom of the pyramid, lose their money. They also face prosecution, as pyramid schemes are illegal.

Pyramid schemes can be spread by mail or email.

Tricks – High rate Telephone and Internet Telephone numbers

Swindlers can use 090 numbers to carry out many scams.

They include phony prize and holiday offers. They often begin when the swindler sends you a letter claiming that you have won something and asking you to ring a particular number.

You might be promised a free gift or bargain holiday, but what you actually get is often quite disappointing.

If you are told to ring because you are the winner of a prize draw you will receive nothing at all, except a huge phone bill – sometimes £15 for a single call.

If you ring you might have to listen to a long recorded sales message. Remember, the longer you stay on the phone, the higher the charge for the call. You might even be directed to a second high rate number for extra information or to order your gift.

You could also fall victim of internet fraud. This happens where you unknowingly dial up to a high rate telephone number on the Internet and charged a very high rate for the call. If you use the internet it is important to check your telephone bil for unexpected premium rate charges.

Tips to avoid high rate scams

  • remember that high rate telephone numbers attract charges by the minute, usually well above the cost of a local or long distance call
  • don't dial a high rate number unless you are absolutely sure how much you will be charge and you are willing to pay for it
  • be on your guard if, after dialling one 090 number you hear a message asking you to dial a second 090 number.

Tricks - warning signs an elderly relative may be a victim

Many tricks are targeted at elderly people, who are often regarded as vulnerable.

Warning signs that an elderly relative or friend may be a victim of a tricks are:

  • there is a marked increase in the amount of junk mail for contests, mail order catalogues, prize draws and clairvoyants
  • an increase in the number of phone calls received or a large increase in the cost of phone bills
  • secretive phone calls
  • an inability to pay day to day bills or a need to borrow money for unstated purposes.

Tricks – Postal Tricks

Everyday people through the UK open their post to find they’ve unexpectedly won a draw, lottery or other exciting prize.

How do you know that it is a trick?

If you are asked to send money in order to claim your prize, chances are it is a trick. Often the money is described as a ‘management’ ‘administration’ or ‘handling fee’ or you may be asked to make a small purchase or call a premium rate phone number in order to claim your prize.

Whichever way it is communicated, you will be parting with money that you will never see again let alone the promised prize. So it you are unsure ask yourself these questions first:

  • What am I being asked to pay for?
  • Can I afford to lose the money?
  • Does it look too good to be true?

Watch out for these other warning signs

  • You must send a fee to make your claim.
  • Then promotion is based overseas.
  • You are asked to send money to a PO Box number or abroad.
  • Prizes are shown in foreign currency.
  • You are asked for your credit card or bank details.
  • You must persuade others to join the scheme in order to claim your prize
  • It is an unsolicited letter, phone, text message or email.
  • You must respond at once to claim your prize.
  • You must purchase goods to claim your prize.
  • You must call a premium rate number.

If you are unsure it is a Trick or not BIN IT!!

This document was provided by Islington Law Centre.