#10. Business and loan company scams.

Scam artists use the victim’s desire to improve his or her lifestyle by offering “business opportunities” or “advance fee loan” scams.

It was very hard for Peggy to get away from home. She tended her two small granddaughters during the day and was usually so tired by the evening that she didn’t feel like going out. She did wish that she could earn a little extra money to help pay expenses. One day, while looking through a magazine, she noticed a small ad: “Earn extra money at home.” She looked closer. “No experience required, all materials supplied.” The ad listed an email address and an out-of-state post office box. Peggy wrote a letter requesting information and shortly thereafter she received a large envelope in the mail. The envelope described a home mailing business and included charts showing how much money she could make each week by processing envelopes for companies in her area. Peggy decided that here was something she could do and still watch the children.

After reading all of the materials, Peggy filled out the application. The application said she needed to pay a $50 application fee. Peggy really didn’t have that much money to waste, but the materials said she could easily make the money back in less than a week. Peggy sent in the money and the application the next day. She waited every day for the materials. About two weeks later, she received a package in the mail. The materials contained an explanation about the envelope stuffing business and some sample advertising. There was a price sheet with a list of “additional items suggested for use in the business.” Peggy opened the book about the envelope stuffing business. The first thing it said to do was to contact businesses in her area to see if they needed an envelope stuffing service. Peggy never did figure out that she was the victim of a scam.

Elements of the business opportunity scam:

• Promises of high returns or earnings with little or no work.
• Application or processing fees charged for explanatory materials.
• Suspect categories of business opportunities typically include vending machines, amusement games, pay telephones, display racks, CD-ROM computer software, and other similar activities.
• Uses out-of-state post office box address, 800-number, or email address.

Sometimes it is difficult for professional to determine whether a business opportunity is real or a scam. To the right person, a business idea can be worth a lot of money. There are many legitimate opportunities for people to work in their homes. Service businesses, mail-order businesses, computer design and desktop publishing, many more activities, can be built into profitable home businesses. The important thing to remember about any business opportunity is that it is a business. All small businesses require a great deal of time and dedication to be successful. Even legitimate ads seldom emphasize the tremendous amount of effort that is necessary to be successful. Either unique products or unique skills can become the basis for a profitable business. The best place to begin your investigation of small business opportunities is your local public library. You can also consult your local community college or university campus for additional information about beginning a home business. Other resources include government agencies, including the Small Business Administration.

Although legitimate business opportunities may advertise in newspapers and magazines, many scams are also included. Exercise extreme caution if the ad contains little more than an “800” number and promises of high returns. Do not assume that because the ad appears in a major newspaper or magazine it has been checked for accuracy.

No matter what type of business opportunity you are interested in, you should become acquainted with the business before you spend any money. Is important to obtain a detailed description of exactly what kind of work is required. Peggy, in the example above, was looking for a job she could do entirely at home. If she had investigated the envelope stuffing business she would have found that she needed to go out to businesses in her area to solicit work. Because she was unable to do this, no matter how much material she had received, she would have been unable to do the work. Business opportunity and franchise promoters are required to provide you with disclosure documents before you sign any contract or pay any fees. This disclosure document should contain sections on risks, necessary business experience, background information concerning the company and its directors, any history of lawsuits against the offering company, a detailed explanation of any fees and conditions under which they will be paid, audited financial statements containing information for at least the past three years, and substantiation of any earnings claims.

Most states and cities require some type of business registration. If you live in a city there may be restrictions on the type of business you can do in your home. Often cities do not allow inventory-type businesses in residential areas, especially if the business requires deliveries in trucks.

Many times the promised materials either never arrive or are useless. In some instances, scam artists sell nonexistent “franchises” for hundreds or thousands of dollars. In every case the loss could be avoided if the potential victim would spend time investigating the business opportunity. One of the best ways to investigate is to ask for references and then go and see the business in operation. If you merely talk to the references, you could be talking to one of the scam artist’s confederates sometimes known as “singers,” or individuals who provide phony testimonials. If the business involves retail locations, take the time to visit locations where the business is actually in operation. Interview at least five or six references. Ask them specific questions about the business and the support received from the promoter. Ask specific questions about their income and whether it lived up to their expectations. Also ask them what they like and dislike about the business opportunity.

Seek professional help. Don’t lose thousands of dollars because you’re unwilling to spend a few hundred dollars talking to an accountant or lawyer. If you consult a professional, listen to what they say and follow the advice you receive. Remember that a scam artist will promise practically anything to get you to invest.

The number of new businesses that succeed in staying in business for more than one year is very small. If you’re involved with a scam there’s no possibility of success no matter how hard you work.

Protect yourself by:

• Investigating thoroughly any potential business opportunity.
• Asking for references where you can actually observe the business in operation and watching out for “singers.”
• Obtaining a detailed description of the work required to make the business operate.
• Talking to the Better Business Bureau and local government agencies about the type of business involved.
• Checking the public library or the Internet for information about the business.
• Checking compliance with state and local laws and obtaining any necessary licenses.
• Interviewing five or six references.
• Getting professional help and advice.
• Remembering that a scam artist will promise practically anything to get you to invest.
• Making sure that you can operate the type of business you’re interested in from your home without violating any zoning restrictions or ordinances.

Another type of scam involves loans for which the person must pay an advance fee of some kind.

Bill had his eye on a new bass fishing boat. Unfortunately, he lived on a very strict budget. The company he worked for had shut down the plant in his hometown and since he was close to retirement, he was unable to get a new job. Although he had worked for many years his pension was not large and he relied on Social Security to make up the difference. One day he received a postcard advertising a low interest loan. The card said that if he called the number they could qualify him over the phone.

Bill called the number on the card was told that within a few minutes he could qualify for a loan. The man on the phone told him that there was a fee, but the loan was guaranteed. The man asked him several questions about his work history and financial situation. He told Bill to wait a few minutes and he would have an answer. When he came back on the line he congratulated Bill on qualifying for the loan and told him that there was a $100 origination fee. Bill was instructed to have an overnight mail pick-up would arrive at his home that afternoon and that the company would pay to have his check sent overnight. The man told him he would receive the loan about a week after they received the check. After two weeks Bill tried to call the number back. The number had been disconnected. It was some time before he realized he had been scammed.

Elements of the advanced fee loan scam

• An offer of guaranteed credit for the payment of a fee.
• Loans offered at a below-market interest rate.
• Very quick or instant loan qualification.
• The requirement that the loan fee be paid immediately.
• The transaction is conducted entirely over the telephone.
• Advertisements for loan services made by telemarketing or direct-mail advertising.

It is common for loan institutions, including banks, to charge a loan processing fee, or application fee. This fee is charged to cover the costs of qualifying you for a loan, and obtaining credit information. The difference between legitimate businesses and scams is that the advance fee loans schemes claim that the fee will “guarantee the loan will be made.” A guarantee or promise of qualification for a loan can signal a potential scam, especially if the company is willing to send a runner to pick up your check or pay for overnight delivery. Many of these companies also advertise that they can obtain a loan for you, even if you have bad credit or no credit

Legitimate loan companies do not guarantee loans. In some states, assessing or collecting an advanced fee for loan is a crime, although some businesses such as banks and credit unions are exempt from this prohibition. Before paying a fee to obtain a loan, make sure you are dealing with a legitimate loan company. Banks, credit unions, and loan companies are highly regulated and information concerning legitimate companies should be available from your state banking department or attorney general’s office

Protect yourself by:

• Verifying the status of any loan company with which you are not familiar with the state banking department or attorney general’s office.
• Realizing that a legitimate loan institution will not “guarantee” the receipt of a loan.
• Realizing that legitimate financial institutions cannot risk qualifying you for loan without researching your credit history.

#9. Bank examiners and “government” scams

Scam artists prey on the victim’s respect of “official” institutions to steal money. This is done through impersonating bank examiners, credit card companies, and government agencies.

Edna received a call from a person claiming to be representative from her bank. The caller claimed that a certain amount of money was missing from her bank account and that verification was needed of the loss. The caller went on to explain that they suspected one of the bank’s employees was taking the money. “Would Edna like to assist the bank in catching the crook?” Of course Edna agreed to help the person on the phone. The caller said that an official from the bank would come to her home to examine her bank book and verify the balance. Shortly thereafter a nice looking young man in a uniform appeared her door he showed her identification that indicated he was from the bank. He asked to see her bank book. After making some calculations he asked her if she could come to the bank with him and withdraw some money to verify the bank balances. Edna went with the nice young man to the bank. She withdrew a large sum of cash at his instruction. He gave her a written receipt for the cash and said he would contact her the next day. Three days later when she still had not heard from the bank, she called the police and found out she was a victim of the bank examiners scam.

Elements of the bank examiners scam

• A person calls or visits your home claiming to be representative of your bank or credit union.
• Commonly, the person represents that the bank is experiencing some trouble with your account, either a dishonest employee, computer problems, or something else requiring your attention.
• Your asked to help catch the crook, verify the bank balance, or do something else, but the solution always requires you to withdraw money from your account.
• A supposed bank representative, sometimes in uniform, comes to verify the amount withdrawn from your bank. This person will often give you an official looking receipt for your money.

With the bank examiners scam, sometimes three or more people are involved. However, the common theme is that something is wrong with the bank account and the victim needs to withdraw cash to help solve the problem. The scam artist relies upon the victim’s sense of civic duty and honesty. The acting can be extremely persuasive. The bank examiner scam relies entirely upon the victim’s ignorance of correct banking procedures. It is important to realize that you will never be contacted by the bank and asked to verify your account balance. In the unlikely event that a legitimate bank had problems with a dishonest employee, computers, or the accounting system, the bank certainly would not want to tell its customers or involve them in the scandal. The bank would be much more likely to call a law-enforcement agency or an accounting firm. Law-enforcement agencies are perfectly able to provide decoys without involving bank customers. Bank examiners do exist but they work for large accounting firms, state agencies, or the federal government. They also work directly with bank officials, not customers. An ordinary bank customer would probably never come in contact with a bank examiner.

If you receive a call concerning your bank account, request that the information be provided to you in writing. If the caller insists that the matter must be cleared up immediately, request the name of the caller’s supervisor. Then hang up and call the bank back after verifying the bank’s number from the telephone book or your statement. Ask for the name of the person you were told was the supervisor. It is important to look up and independently verify the telephone number of the bank because if you call the number given you by the scam artist there is nothing to prevent them from pretending that you are calling the bank. If you have a question about the bank’s contact either go directly to the bank and talk to the manager or ask a friend or relative to go for you. Never withdraw money from your bank account at the request of a stranger.

As in many other scams, scam artist will attempt to get the victim involved without giving the person time to think things over. They realize that the more time the victim has, the less likely they will cooperate. The scam artist may appear very upset, offended, or even angry at the suggestion that you should verify his or her credentials. They will often have the same reaction to the suggestion that you call a friend or other adviser.

Sometimes, the scam artists will impersonate government agencies (real or fictitious) and attempt to steal money from unsuspecting victims. In one kind of scam, a caller contacts a scam victim and pretends to be from the “state scam enforcement agency.”

Ruth lost $2,500 in a business opportunity scam. A few weeks later, she received a call from a woman who identified herself as working for the state scam enforcement agency. The woman explained that her agency assisted scam victims in recovering their lost money. Ruth was immediately very interested. “How did you get my name?” asked Ruth. The woman explained that her agency recently shut down a local scamming operation and recovered the list of victims. They were in the process of contacting the victims to assist them in recovering their lost funds. Ruth was still very upset about losing the money. “What are the chances that you can get my money back?” she asked.

The women explained the program in detail. Ruth asked a number of questions but the woman had answers for all of them. Finally, the woman asked Ruth to verify her credit card number. The woman read the number and asked if that was correct. Ruth was very surprised to hear her own credit card number. The woman mentioned that there was a nominal processing fee and would be all right to charge a fee to her credit card. Ruth agreed and the conversation soon ended. When Ruth received her credit card bill she realized she had been victimized again.

The recovery of money in these types of scams is contingent on the payment of some type of registration or processing fee. Sometimes the representative will encourage you to pay a larger fee to “expedite” the recovery. Payment for the service is requested immediately by credit card or a courier is sent to pick up a check. It is important to realize that scam artists commonly sell the lists of their victims to other scam artists and these lists often contain considerable personal information, such as credit card numbers and other financial information. The scam artists use a variety of misrepresentations to add credibility to their solicitation. You may be told that you will be placed at the top of the list for reimbursement from the previous scam. The scam artists may also charge large fees to provide information that could be obtained free of charge from nonprofit consumer protection agencies and government agencies.

Under the federal Telemarketing Sales Rule it is illegal for recovery room operators to receive payment until seven business days after you receive the recovered money or other lost item. National, state and local consumer advocacy agencies and legitimate nonprofit consumer assistance organizations do not charge for their services. It is also very unlikely that a legitimate assistance organization will call fraud victims directly.

You should follow many of the same steps to protect yourself as you would with the bank examiners scam. Individuals who claim to represent these organizations should be investigated. The easiest way to do this is to request the exact name of their organization and then look up the organization in the telephone book where government agencies are listed. Call the government agency or organization and ask them to send information about their operations and verify that the individual who called you actually works for the organization. The chances are that you will be unable to find the name of the organization in the telephone book.

Protect yourself by:

• Never giving bank account information to someone over the phone.
• Realizing that the banks do not to enlist their customers in attempting to catch crooks or solve accounting problems.
• Never withdrawing cash from your bank account or an ATM at the request of a stranger.
• Calling the bank directly to verify any contact or verifying the employment of any individual who claims to represent a nonprofit organization or government agency. You can also investigate the bank or company by calling the local consumer protection agency (usually affiliated with the state Attorney General’s office).
• Never allowing strangers to come into your home while you are alone.
• Being skeptical of people who offer to recover money, merchandise, or prizes for an advance fee.
• Obtaining a detailed description in writing of the specific services offered by recovery organization and any charges.

#8. Charity scams

Not content with stealing money and financial information through “product sales” and investment schemes, scam artists also impersonate charitable organizations.

Every year when the circus came to town Frank got the same phone call. The caller identified himself as a representing the Friends of the City Police. The man would always ask him if he wanted to support his local police department. Frank didn’t want to seem uncooperative, so he always agreed to listen to the sales pitch. The man explained that the Friends of the City Police were raising money to take underprivileged children to the circus. He always got Frank to sponsor the five children. Frank felt good about sponsoring underprivileged children to go to the circus since he enjoyed going to the circus when he was young. Frank didn’t have time to go to the circus himself but he always felt that sometime he would like go with the children.

One day, Frank attended a block awareness program in his neighborhood put on by the local police department. After the short meeting, he found himself talking to the police officer and mentioned that every year he gave money to the friends of the City police to take underprivileged children to circus. He was very surprised and upset when the police officer told him that not only was the organization not affiliated with the police department, but that it was a well-known phony charity they had been trying to prosecute for years. Frank was a victim of charity scam.

Elements of the charity scam:

• Unsolicited contacts concerning donations to an unfamiliar charity.
• Emotional or hard sell appeals.
• Names deceptively similar to well-known charities.
• Failure to provide background information concerning salaries and other expenses of the charity.

Older people are targeted for solicitation by charity scams because people over 75 give the highest percentage of their income to charity of any age group. Many charity scams use names either associated with legitimate organizations or deceptively similar to legitimate charities. The “Friends of the City Police” is a classic example. Other scams might use names like “North American Cancer Society” or “Open-Air Preservation Society.” There is seemingly no end to the inventive types of scams in the name of charity.

The important fact to know about any charity is the percentage of the funds raised that go for the charitable purpose. Some “charities” spend almost all of their money in fund-raising, giving only a very small percentage to the charitable purpose. In a charity scam none of the money goes to the charitable purpose. As in the example above, the “Friends of the City Police” may not actually be taking any children to the circus and may not be affiliated with the City police at all.

In contrast, there are legitimate charities where 100% of the funds raised goes to the charitable purpose. Any legitimate charity would be glad to provide you with the information concerning the percentage of funds spent in all the various activities. Even if the amount given his very small, it is absolutely important to know where your money is going. The real tragedy is that the charity scams siphon money away from legitimate charities.

Always ask for written information about the charity and its operations before giving. Never respond to charitable requests over the telephone. If you’re truly interested in the cause, and ask the person to send you information in writing about the charity, including the names of the officers and directors, financial information, and affiliated organizations or sponsors. Real charities will bend over backward to provide you with adequate information and may even give you an opportunity to volunteer your time.

Charity scams may make their appeal by charging a high price for an ordinary item indicating that the extra amount paid will go to support the charity. Often the only charity is the pocket of the fundraiser. Sometimes the appeals for contributions will be deceptively similar to an ordinary bill or invoice. The expectation being that the unwary victim will pay the bill without thinking. Many charity scams use high-pressure tactics, telling “heart-wrenching” stories to make you feel bad about not contributing to their charity. If you ask for time to consider making the contribution, the scam artist will quickly move on to another victim.

Many states require charitable or organizations to be registered with the Secretary of State’s office or other agency in order to do business in the state. At the very least, before donating to any charity you should find out whether the charity is registered and allowed to do business in the state. Never make a charitable contribution to an individual. Charitable contributions should be made by check payable to the charity. Particularly when giving large sums of money, it is important to verify that the supposed charity is a recognized non-profit charitable organization by the Internal Revenue Service so that your contributions are tax deductible.

Protect yourself by:

• Insisting that all charitable solicitations be made in writing.
• Verifying whether or not the charity is registered or listed with the Secretary of State’s office in your state or other administrative agency.
• Making all contributions by check made out to the charity not an individual.
• Requiring the charity to give you information concerning the percentage of contributions that go to the charitable purpose, names of the officers and directors, past history, and other pertinent information.
• Verifying the tax status of the organization.
• Reporting any violations to appropriate governmental enforcement agencies.

#7. Trusts and estate planning scams

Scam artists play on the fears of senior citizens by using trusts and estate planning scams.

Ruth’s husband, Richard, was recovering from bypass surgery. Richard had worked hard all of his life and they recently began discussing retirement. However, Ruth tried to get Richard to write a will without much success. She saw an ad on television about a “living trust” and called the “800” number. The woman on the phone said that she would make an appointment for their “certified trust adviser” to come to their home. Ruth wasn’t sure she wanted a salesperson to come to her home, but the woman on the phone assured her that all of their representatives were estate planning experts.

Two days later, Ruth and Richard received a visit from the estate planner. He seemed nice but his presentation went on and on. After an hour, Ruth was feeling quite tired and wished he would leave. She was afraid of being rude so she continued to listen. The man explained the virtues of a living trust over a simple will. Finally, Ruth and Richard agreed to purchase the entire package. They signed the documents and the man left with their check. Ruth and Richard were certain that the man had told them that the trust would save them many times its cost and taxes alone, not to mention the savings in probate costs. Among the documents that they signed were some “powers of attorney.” Ruth distinctly remembered the man saying that the power of attorney would help her take care of her husband’s affairs if her husband became incapacitated.

A few months later, Richard ended up in the hospital on life-support. When Ruth tried to use the power of attorney to the hospital refuse to honor it. The hospital representative explained that it was the wrong kind of document and was not legal in their state. He told Ruth she need to talk to her attorney. Ruth took all of the documents and visited an attorney who specialized in estate planning. After reviewing the documents, the attorney told Ruth that she needed a special kind of power of attorney to continue to be effective since Richard was incapacitated. The power of attorney sold by the estate planning expert did not have the proper language to be effective in their state. In fact, none of the documents were effective. The attorney offered to redraft all of the documents for a price that turned out to be much less than the estate planning expert had charged them. However, the attorney explained that since Richard was already incapacitated, he could not sign of power of attorney. Ruth realized she had been severely damaged by the misrepresentations of the so-called “estate planning expert.”

Elements of the living trust scam:

• Complete estate planning packages for a set fee.
• Work to be done by “certified estate planners.”
• The so-called estate planners spend more time selling you the product than they do asking questions about what you really have and need.
• Representations of substantial tax savings from a “one size fits all” product.
• High pressure tactics to pay the fee and sign the documents without time to consult with business professionals.

Although a living trust can be a legitimate estate planning device, salespeople using scare tactics and misrepresentations target senior citizens with worthless or at best inadequate programs. These individuals often represent themselves as being “certified trust advisers” or “estate planning experts” when they may have no qualifications at all. There are no government agencies that “certify” estate planning experts. The bar associations of some states do certify attorneys as tax experts or experts in trust and estates or probate but any other references to “certification” should be suspect.

Living trust salespeople use high-pressure tactics to sell living trust packages costing $1,000 or more. Before purchasing such a package, the consumer would be well advised to consult with a qualified attorney. Tax laws, including estate tax laws, change constantly and the “one-size-fits-all” living trust package may do more harm than good. Unscrupulous salespeople may emphasize and over-inflate the cost of consulting an attorney, while at the same time extolling the virtues of their particular package in avoiding both legal and probate costs.

Many estate planning scams are based upon the premise that it is best to avoid probate at any cost. Probate is nothing more than the legal orderly way of transferring property from one generation to another. Historically, probate got a bad name from the practice of probate attorneys of charging a percentage of the overall value of the estate as a fee. This practice has mostly disappeared since the passing of the Uniform Probate Code beginning in the early 1970s. Under current probate code practice, attorneys are required to submit their requests for attorney’s fees for court approval before being paid by the estate. The other concern, which gave probate of bad name, was the fear of paying excessive estate taxes. The amount of an estate exempt from federal taxes has been increasing over the years. Before purchasing a living trust package or any other supposed estate planning device, it is very important to calculate your gross estate to determine whether it is subject to tax at all.

You should certainly check the credentials and qualifications of any supposed estate planner, including attorneys and insurance salesmen. It is important that an attorney be admitted to practice law in the state where you are located.

Beware that some trust preparers ask for fees in advance. You may not want to do business this way. Be sure and determine whether or not the estate planner has a refund policy. Make sure you get the refund policy in writing. Providing estate planning services may also serve as a “front” for sales of insurance or annuities.

Any estate plan should reflect your wishes and not those of an adviser or estate planning expert. You should also be aware that many states have strict laws concerning the validity of estate planning documents. Often the documents must be signed and notarized in a particular way to be valid. Make sure the person doing your estate planning understands your local requirements and follows the legal rules.

Protect yourself by:

• Getting competent legal and accounting advice before beginning an estate plan.
• Carefully checking the credentials and qualifications of any supposed estate planner.
• Raising questions when preparers ask for fees in advance.
• Getting a complete proposal in writing including any refund policy.
• Verifying all tax representations from a competent tax professional.

What do I do about a landlord that won't fix anything?

In response to a comment, in Arizona, and likely in most states, the statutory law gives the tenant a number of remedies. These include some self help, such as fixing the item with an offset to rent, or avoiding the lease, meaning being able to move without breaking the lease. In my experience, in most cases these types of the remedies are really no benefit to the renter or lessee. Most larger cities have a rental assistance office. You can get a copy of the Arizona Residential Landlord and Tenant Act from the Arizona Secretary of State's Website: www.azsos.gov

In Phoenix you can call Emergency Evictions Assistance helps individuals with Crisis landlord/tenant assistance for individuals. They are located at 1112 E. Buckeye Road, Phoenix, Arizona 85034 and their phone number is 602-257-0700. There are similar agencies in other larger cities across the country.

#6. Scams involving your property

Scam artists attempt to take advantage of victims in many ways, such as “lost property” or “lost pet” scams. Scams can also involve home improvements and auto repairs.

Abigail loved her pet miniature Schnauzer “Tippy.” He was just like one of family. She was devastated when Tippy was missing one afternoon. She searched the entire neighborhood without success. She felt like she had lost her dearest friend.

The next day, she got a picture of her pet and made a flyer on her computer. She took the picture and the flyer to a nearby copy center and made twenty-five copies. Abigail posted the copies on trees and poles in the neighborhood. The next day she received a call from someone who said they had found her dog. Abigail was overjoyed. Then, the person on the phone told her that he would need $150 so he could ship the dog to her. He told her to send money to a mail drop in a nearby town. Abigail didn’t know what to do, but she finally sent to money later that day. Unfortunately, she never received the dog. Abigail was a victim of a lost property or lost pet scam.

Elements of lost property or lost pet scam:

• The victim loses a valuable piece of property or treasured pet.
• In an attempt to find the property or pet, the victim advertises, either in the newspaper or by flyers in the neighborhood.
• The victim is contacted by someone who offers to return property or pet for a price.
• The victim pays the money, never hears from the person again and never receives the property or pet.

This is one of the most objectionable scams. Only the lowest kind of scam artist would try to take advantage of someone who had lost a pet or other valuable property. The scam artist takes advantage of the victim’s attempt to locate the pet or lost property by obtaining to the victim’s telephone number either through the posted flyers or the ads placed in the classified section of the newspaper.

Usually, law enforcement agencies, such as the police, are anxious to find the scam artist. But, often they have no way to trace the calls or the money. When the police or telephone company has tried to trace the telephone calls to find the scam artist, they usually find that the call was made from a pay telephone. It is practically impossible to determine who placed the call from the pay telephone.

A version of the lost property scam is the unclaimed property scam.

Evelyn received a phone call from a woman who said she represented the Property Clearinghouse of America. She explained that they were an organization that attempted to find the owners of unclaimed property. She said that this week they were dealing in airport property and that she was investigating four large boxes that had been left at the Chicago airport. Apparently, she said, the boxes were addressed to Evelyn at her home address. Evelyn couldn’t imagine who was sending her boxes. The woman explained that the boxes would be sent to Evelyn if she would simply pay the shipping and handling cost. She requested a credit card number and explained the amount of the shipping charge. Evelyn was still very puzzled but she gave a lady her credit card number and confirmed her address. It wasn’t until the next month when she received a credit card bill that she realized she had been scammed.

In these scams, the scam artists usually say the merchandise or packages have been abandoned, but that they can be delivered for a fee. The merchandise or packages are never delivered or, if delivered, are of nominal or very limited value.

Protect yourself by:

• Absolutely never sending money to anyone as a result of a phone call request. Refuse to give personal or financial information to a telephone caller.
• Insisting on physical return of the property or pet before making any payment for its return.
• Contacting the police or other enforcement agency immediately upon receiving a phone call from someone offering to return the property or pet for payment.
• Taking the time to investigate any representations concerning unclaimed property.
• Getting a callback number and verifying with the airport or other shipping source concerning the unclaimed property.
• Taking the same precautions you would with any telemarketing scheme.

Another area in which you should be cautious is that of home improvements or repairs. Many variations exist of the home improvement scam.

Eric was out pruning his roses when a man with a pickup truck stopped in front of his house. “Who could then be?” he wondered. A man got out of the truck and walked up to him.

“Hi, my name’s George. I’m a paving contractor and we just finished a job around the corner and had some extra paving material leftover. I noticed that your front driveway needs patching. We can do the job at a good discount because we already have the materials and I don’t want my men to lose a day’s work.”

Eric looked at his driveway. It certainly did need repair and the man seemed nice enough. “How much would cost?” he asked.

“Well, if we did the job today with the materials that we have on hand, I could do it for $300.”

That seemed pretty expensive to Eric, but the man was right there ready to do the work. In fact, he had already started unloading the truck. Almost before he knew what happened another truck arrived and the men were already doing the job. He didn’t remember telling them that they could start.

“I can only take payment in cash because I have to pay my men,” said the man. “If you don’t have the cash, you could go cash a check and by the time you get back we’ll be finished.”

Eric went to the bank and got the money and came back just as the men were leaving. As the men drove off, he noticed that the truck had an out-of-state license plate and began to worry about the job. Before too long, he realized that he had been taken. The men had used inferior materials and done an extremely poor job. It certainly was not worth $300. He didn’t remember hearing the name of the company. Later, when he had the job done over, he found that a local licensed contractor would do the job for $100 and give him a guarantee. Eric had just become a victim of the home repair scam.

Elements of the home repair scam:

• An offer to do repair or maintenance work either quickly or for a special price because materials are “left over” from another job “in the neighborhood.”
• Lack of a written estimate or contract.
• Request for payment in cash.
• Offer to do the job while you wait for payment at the end of the job.
• Cars or trucks with out-of-state license plates.

There are a number of warning signs of the home improvement scam. Scam artists employing this device often look for older people standing outside their homes. They offer to do home repairs at a reduced price using materials “leftover from another job in the neighborhood.” The final price demanded for the repairs is often higher than the initial estimate. Many times the bogus contractor fails to get all the proper building permits and licenses required by the city, county, or state.

Before employing any contractor to do repairs on your property make sure of the repair person is licensed and bonded. It is always a good idea to call the state licensing bureau, such as the registrar of contractors, to verify that the person is licensed and bonded. Another good practice is to contact at least one other contractor for an evaluation and second estimate. Always ask for references whether or not you actually contact them. Take some time‑several days‑to think things over and call the references given by the repair person.

Protect yourself by:

• Using only contractors registered and bonded by the state.
• Checking the references and credentials of all contractors.
• Getting all offers in writing, signed by authorized representative of the contractor.
• Getting more than one estimate, even for small jobs.
• Taking your time to think over any contracting job.
• Making sure you or the contractor gets all the necessary building permits and licenses.

Another type of involves automobile repairs. These scams attempt to get the victim to pay for unneeded parts or service.

Sandra’s husband always took very good care of their automobile. When he passed away suddenly, it took her many months to adjust to loss. While driving to the supermarket she noticed that the car was pulling to the left. She began to worry that there was something seriously wrong and finally decided to take the car to the dealer to have it repaired. The service manager seemed very nice. Sandra waited in the lounge provided for customers while her car was repaired. Finally, after considerable time, the service manager told her that there were serious problems with the steering and the front end of the car. The repairs would be nearly $1,000. Sandra was shocked. She had no idea car repairs could be so expensive. The manager went on to tell her that would be extremely dangerous to drive the car in its present condition. Sandra decided she’d better get the car fixed. In this case, Sandra never did learn the she’d been scammed. What she didn’t learn was that the “steering problem” was nothing more than a low front tire.

Elements of the automobile repair scam

• Unnecessary repairs done with or without legitimate repairs.
• Substitution of inferior parts for genuine manufactures replacement parts while charging the full manufactures replacement parts price.
• Padding the bill with unnecessary or worthless service.
• Failing to give an accurate estimate before beginning repairs.
• Replacing good serviceable parts with used bad parts from another automobile.
• Using the car for business or personal purposes under the guise of “test driving” the vehicle.
• Overcharging out-of-town or apparently helpless customers.

Unfortunately, Sandra has a lot of company in the world. Unless you are a mechanic and do all the work yourself, it can be difficult to know when every repair job is necessary. However, there are some things you can do to protect yourself. It is very important to at least know, generally, what is wrong with your car before taking it in for repairs. If you do not have knowledge or interest to understand your car’s problems, find a friend or an acquaintance who can help you. If the mechanic recommends an expensive repair it is important to get a second and perhaps even a third opinion.

Protect yourself by:

• Finding an auto repair shop before you need one.
• Making sure the mechanic working on your car is qualified to make the repair.
• Getting a written estimate for all repairs over $50.
• Checking with any regulatory agencies to see whether complaints have been filed against the repair shop.
• Obtaining a legible, detailed copy of the repair invoice showing any work done and describing any guarantee.
• Obtaining more than one estimate on major repairs.
• Making sure the repair shop is authorized to make manufacturer’s or extended warranty repairs.
• Insisting that the repair shop contact you if the repairs exceed the estimate by 10%.
• Immediately making a complaint about any dishonest repair practices to the appropriate government enforcement agency.

#5. “Pigeon Drop” scams

“Pigeon Drop” scams are some of the most elaborate and blatant ways of stealing money.

Sarah enjoyed malls and today she had lots of time. She particularly liked window shopping at the more expensive stores. While she was admiring a particularly attractive dress, a well-dressed young woman who appeared to be very agitated came up to her. The young woman was carrying a sack.

“Pardon me,” the woman said. “Look what I just found.” She opened the sack just enough to show Sarah what appeared to be a large sum of money.

“Goodness,” said Sarah. “Where did all that money come from?”

“I just saw the sack sitting there on the ground and opened it up. I found all this money inside. How much money do you think there is in the sack?”

Sarah had never seen much money before. She was very curious why the young woman had spoken to her. “Is there something I can do to help you?” asked Sarah.

“When I saw you, I just knew that you could help me. Let’s sit down here and see how much money is in the bag.” The woman sat down at a nearby bench and opened the bag. Sarah sat down to see how much money the young lady had found. There was indeed a lot of money in the bag‑it contained more than $15,000.

“How could anyone lose so much money?” asked Sarah. “It sure makes you think that people today are very peculiar.”

“I knew you’d understand,” said the young woman. “You’re so sympathetic that I just have to share this money with you.”

Sarah was very surprised. She never imagined that by going to the mall that day she would come into so much money. The young woman went on, “I’ll give you half, if you’ll just help me.”

That would be $7,500. Sarah hadn’t seen that much money for in years. She did have a lot of money in the bank but she never withdrew more than just enough to live on. Sarah began to imagine the things she could buy with $7,500. Maybe she could buy the new dress she saw in the store window. The young woman began telling her a story about all the difficulties she had gone through recently. Sarah hardly heard a word she said.

Suddenly, the young woman stopped talking. “I just had a terrible thought,” she said. “What if somebody claims the money?” Sarah had always been honest but she wanted to believe that no one would claim the money. “I must know if you have enough money to pay me back if someone claims the money in the sack,” she said.

Sarah told the young woman that she had plenty of money in the bank. The young woman assured her that she trusted her, but just the same she would like to make sure Sarah was telling the truth. They walked to the bank branch right there in the mall. Sarah withdrew $7,500 of her own money to “prove” to the young woman that she had enough money in case the real owner came forward. The young woman took the money, put it in an envelope, and walked towards the front of the bank while Sarah followed her. “We’ll sit down right here and I’ll count the money.”

“Just a minute,” said the young woman. “I need to run to the restroom.” She handed the envelope to Sarah and walked away. Sarah sat there for a long time. Finally she looked in the envelope. All she saw was some pieces of newspaper. The young woman had disappeared with her money. Sarah just became a victim of the pigeon drop scam.

Elements of the pigeon drop:

• A stranger approaches you with a story about having found a large sum of money.
• The stranger offers to share the money with you if you will assist in some way.
• Before receiving your share of the money, you must show your “good faith” by putting up a deposit.
• The stranger insists that you go to your bank right then to take out the money for the deposit.
• The stranger will either take the money to count it, or make some other excuse for leaving with the money.

The pigeon drop is a very complicated scam with a number of variations. Sometimes this scam is run by two or more individuals. The story told by the scam artists is always different, but the elements of the scam are essentially the same. Whatever the story, the intent is to get the victim, usually an elderly person, to put up the “good-faith” money in case the real owner is found. The elderly person’s good judgment is blinded by seeing a large sum of money. Although it seems nearly impossible that anyone would fall for such a story, every year there are accounts of people being victimized. To guard against this fraud, it is merely necessary to ask yourself “Why would someone who had just found a large sum of money offer to share half of it with a perfect stranger?” It is important to understand that scams do not need to be reasonable or even logical to take advantage of the victim.

Protect yourself by:

• Never discussing personal or financial information with strangers.
• Never allowing a stranger access to your credit card or bank account numbers.
• Thinking “Why would anyone who had just found a large sum of money offer to share part of it with a complete stranger?”