Buyers Tips


According to the Federal Trade Commission, American consumers lose more than $40 billion a year to telemarketing fraud. Despite repeated warnings from the BBB, consumers continue to fall for pitches to promote fraudulent sweepstakes and vacation packages. And, in light of the economic downturn it can be expected that telephone hucksters will zero in on consumers' financial vulnerabilities. Some of the latest telemarketing pitches include offers for credit card loss protection plans, international lotteries and advance fee loans.

Credit Card Loss Protection: If you receive a call from someone who claims that you need a credit card loss protection plan, do not buy the pitch unless you check out the company! Telephone scam artists are lying to get consumers to buy worthless credit card loss protection and insurance programs. Some scam artists tell consumers that according to a new law, people are now liable for all unauthorized charges on their account. This is not true! If you did not make the authorized charge, do not pay it. Follow your credit card issuer's procedures for disputing charges you have not authorized. Your liability for unauthorized charges remains at $50.

Do not ever give out your personal information -- including your credit card or bank account numbers -- over the phone or online, unless you are familiar with the business.

Advance Fee Loans: A different kind of "loan shark" is preying on unwary consumers by taking their money for the promise of a loan, credit card or other extension of credit. Advertisements and promotions for advance fee loans "guarantee" or suggest that there is a high likelihood of success that the loan will be granted, regardless of credit history. But to take advantage of the offer, you have to pay a fee first. The catch is, you pay a fee, and the scam artist takes off with your money and the loan never materializes.

Keep in mind that legitimate guaranteed offers of credit do not require payments up front in order to make a loan application. It is illegal for companies doing business by phone to promise you a loan and ask you to pay for it before they deliver.

International Lottery Scams: If you receive a call stating you have won thousands of dollars in a lottery, hang on to your wallet. It is a fraud. All foreign lotteries solicited by mail are illegal. Even so, scam operators, often based in Canada, are using the telephone, direct mail and Internet to entice U.S. consumers to buy chances in high-stake foreign lotteries, from as far away as Australia and Europe. In addition, lottery hustlers use victims' bank account numbers to make unauthorized withdrawals or their credit card numbers to run up additional charges.

Responding to just one foreign lottery ticket can open up the doors to many more bogus offers for lottery or investment "opportunities." Ignore all mail, phone and Internet solicitations for foreign lottery promotions. If you receive what looks to be lottery material from a foreign country, turn it over to your local postmaster.



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