Online scams and fraud warning

July 1, 7:26 PMUS Headlines ExaminerCharisse Van Horn

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The FTC has created a new video to help consumers protect themselves from online scams and fraud. According to the FTC, online scams and frauds, especially fraudulent business opportunities, have been on the rise due to the declining economy. Get rich quick schemes, promising consumers jobs that don’t exist, advertising phony government grants that provide great amounts of money, debt relief and reduction scams, and fraudulent credit and debit card charges are just a few of the scams that unscrupulous scammers are running.

In addition to creating the video and providing resources that will help consumers identify online scams and frauds, the FTC performed an Internet sweep called “Operation Short Change,” and charged 8 companies with fraudulent activities. The companies charged include:

John Beck/Mentoring of America
Wagner Ramos Borges
Grants for You Now
Cash Grant Institute
Mutual Consolidated Savings
Google Money Tree
Penbrook Productions
Classic Closeouts

Each new case is charged with deceptive and unfair practices. Other charges include performing illegal electronic funds and transfers as well as violating the Telemarketing Sales Rule.

The video below helps consumers recognize online scams and fraudulent business opportunities and also shows how easy it is to fall victim to these schemes. The video features a former scam artist who served prison time for his crimes. He shares how the scam artists use high-pressure sales tactics and often hypes up their sales pitch with bogus celebrity endorsements. On his best month, he made $50,000 and he explains the tactics used to target victims, as well as steps consumers can take to protect themselves, as well as tips for recognizing online scams, frauds, and bogus business opportunities.

The decline in the nation’s economy has caused many consumers to become anxious, stressed, and fearful regarding their economic position. This has enabled many to lower their guards while scam artists and fall victim to these schemes. Meanwhile, scammers are using the economic downfall as an opportunity to prey upon consumer’s fears and concerns.

David Vladeck, Director of the FTC’s Bureau of Consumer Protection stated,

“Thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn. Their scams may promise job placement, access to free government grant money, or the chance to work at home. In fact, the scams have one thing in common: they raise people’s hopes and then drive them deeper into a hole.”
Eileen Harrington, Deputy Director of the Federal Trade Commission Bureau of Consumer Protection explained what business opportunity fraud is.

“Business opportunity fraud occurs when someone tells you that they will give you what you need to successfully operate a profitable business. They do so in a way that guarantees and ensures your success.” Eileen Harrington goes on to state that anyone considering investing in a business opportunity should request disclosure documents including earning disclosures from previous investors. She states that if a company will not provide you with those documents, don’t go near the opportunity: it’s a scam.

View the video below for more information regarding online scams and business opportunity fraud.