Cleveland BBB Names Top 10 Scams

POSTED: 2:11 pm EST January 17, 2008

UPDATED: 2:25 pm EST January 17, 2008

The Greater Cleveland Better Business Bureau announced Thursday its list of the top 10 scams that targeted consumers and businesses in 2007:

Counterfeit Checks -- Typically mailed with phony sweepstakes and lottery award notifications, counterfeit checks continued to be a local and national epidemic in 2007. Consumers who received the checks were told to deposit them then withdraw the funds and wire the money to a third party to pay fees due on their winnings. Victims were later notified by their banks that the checks were fakes and suffered the consequences of repaying the money plus any assessed bank fees.

Advance Fee Loans -- Loan seekers with less than stellar credit scores often fall prey to companies promising guaranteed loans regardless of credit history. Applicants are tricked into paying hundreds of dollars in advanced fees. Many advance fee loan scams are found on the Internet and use phony addresses. Victims of advance fee loan scams never receive the promised loans and are unable to recover the fees paid.

Predatory Lending -- The abusive practices of some unethical mortgage brokers and lenders caught borrowers in loan agreements that contained excessive fees or prepayment penalties or adjustable rates that made future payments difficult, if not impossible. Sometimes homeowners were steered to subprime interest rates when they could have qualified for a better deal. Appraisals that overvalued houses and loan applications that falsified applicants’ incomes also contributed. The result was a record number of foreclosures that caused Cuyahoga County, at one point, to have the largest number of foreclosures in the country.

Foreclosure Rescue -- The spike in foreclosures opened the door for foreclosure “rescuers”. These services frequently made empty promises to save homes and provide legal assistance. The BBB warns that some of these companies are operated by individuals who are at best unsophisticated and at worst larcenous, who are ill-prepared to offer meaningful assistance. Most seem more interested in collecting advance fees than saving your home.

Bogus Employment Offers -- These take many forms from e-mails received by job seekers who post their resumes on Internet sites such as Monster.com or CareerBuilders.com to newspaper classified ads. Some are promoting reshipping scams that trick “employees” into receiving packages and forwarding them to an overseas address. The packages typically contain merchandise purchased with stolen credit cards. Other phony jobs require workers to process checks on behalf of an overseas employer who claims they need someone with a US bank account to handle funds. The employer is instructed to deposit the checks in his/her personal account then withdraw the funds and wire them overseas. Checks are later discovered to be counterfeit.

Phishing -- Phishing scams took on a new twist in 2007. Businesses across the country received emails that appeared to come from the BBB with information about a consumer complaint. The emails contained attachments or links that, if clicked on, installed harmful keylogger software that tracked the unsuspecting recipient’s keystrokes on their computer. This information was then forwarded to a computer in another country in hopes of uncovering personal account information and passwords. The Secret Service continues to investigate this scam. Subsequent phish were designed to appear as being sent from the FBI, EEOC and IRS with similar results.

Abusive Collection Practices -- Consumers in several states contacted the BBB after receiving abusive calls from Global Asset Investigations, Worldwide Recovery Services, Worldwide Asset Investigation Services and North American Asset Investigation Bureau (NAAIB). Consumers reported the use of threats or arrest, harassment and intimidation to collect debts ranging from auto loans to credit card loans. All companies used Cleveland area addresses. Consumers reported they were told a summons had been issued for them and would be served by the sheriff’s office if arrangements were not made immediately to pay a debt and that they were being or would be sued. Several consumers requested written documentation of their debt, but never received anything. Some consumers were contacted in error and had nothing to do with the debt. Most complainants admitted they owed the money but were disturbed by the tactics used to collect. One woman reported her debt had been discharged through a personal bankruptcy action. The BBB turned its information over to the Federal Trade Commission for investigation.

Bogus Buyers -- Local businesses were targeted by overseas scammers who posed as customers trying to buy various merchandise. The phony customers primarily used email to place orders and wanted the merchandise shipped to Ghana or other foreign countries. Cost was no object. At some point during the transaction, the buyers tried to use stolen credit card account numbers or get the seller to wire money to pre-pay shipping costs with a promise of reimbursement.

Supplier Scam -- Hotels and motels across the country complained to the BBB after placing prepaid orders with Cleveland area companies for linens, small appliances, soaps and other supplies. American Sales Brokerage Company, Patel Properties Association and Commercial Hospitality Supply solicited hotels/motels by fax offering substantial discounts on its prices for orders prepaid in full by check or cash. Shipment was promised within several days. Complaints cited unfulfilled or incomplete orders, repeated promises of delivery, being placed on hold for 30 minutes or longer, unanswered emails, and a failure to provide promised refunds. The amounts in dispute totaled over $865,000. The BBB provided its files to the FBI for further investigation.

Phantom Puppies, Online Sales -- Online shoppers increasingly became internet fraud statistics when they were scammed by deceptive sellers and buyers. Whether wiring money to pay for puppies that didn’t exist or selling items on internet auction sites to buyers who steered them to bogus escrow services or paid with counterfeit checks or money orders, consumers learned the hard way that the web can be a risky marketplace.

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