The Wayne County Consumer Protection Task Force believes a well-informed public is the best defense against fraud. Please use the information contained here and in the links on this page to learn about the criminals out there who are attempting to prey on honest citizens.

Consumers lose billions ofdollars each year to fraud. People over age 50 are especially vulnerable and account for over half of all victims, according to a study conducted by AARP. People who commit these types of crimes, “con criminals,” often target older people knowing they have spent a lifetime earning their savings. Con criminals go wherever they can to find money to steal. They use everyday tools--the mailbox, the telephone, the Internet--to reach into your pocketbook.

You can help educate your friends, parents, and others by becoming familiar with some of the more common scams and how they operate. Then share that information with others.

Scroll down this page or click on the link to learn more about the specific scams.

Charity Scams

Many people in our country, especially seniors, care deeply about others, and they want to do something good for those who are less fortunate. Unbelievably, criminals will use these altruistic feelings to feather their own nests. These con criminals will make you think you are giving to a good cause but the result is that the money goes to them.

The Opening Pitch

The mail and phone calls are often used in many scams seeking donations for everything from helping disabled veterans, to aiding injured animals, to feeding orphans in Africa, to lobbying Congress about Social Security.  A common ploy is to take a current news event such as a natural disaster and claim to be collecting for that cause.

The Presentation

The presentation is quite simple: the mailer or caller describes the charity or cause in vivid detail, making it seem worthy.  The pitch may play on your feelings of guilt over the crisis or your desire to help others.Often these callers say the money is for police or firefighter associations.

The Result

It is often difficult to determine after the fact if the donation you made was to a bonafide charity and if the money actually got to the cause that was presented. Some charitable fundraisers keep over 80 percent of the money they raise.

How to Avoid It

The best thing you can do before you give to any charity is to find out how much of the money you give goes to the charitable purpose and how much goes to the cost of fundraising. You can do this by asking the charity when they call or by contacting the State of Michigan’s Attorney General’s office regarding registered charities at (517) 373-1152. Questions about police and firefighter fundraising can be found at (800) 769-4515.

Some charity minded people develop their own annual charity-giving plan. They select   charities after investigating them thoroughly.  As part of the plan, they decide how much and to whom they will give each year and then say no thank you when other charities call or write during the balance of the year. This strategy allows the givers to know where their money is going and to avoid being drawn in by a phony emotional appeal.

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Foreign Lottery

In this scam, you receive a call, email or letter--usually from a foreign country-- telling you about a way to select winning lottery numbers, and you need to call a toll-free number to find out more.  There is no need to call that number. All the con criminal has is a winning way to take your money.

The Opening Pitch

Congratulations!  You may receive a certified check for up to $400,000 in cash!  That's right, lump sum and tax-free, it must be your lucky day!  Hundreds of people win every week using our secret system!  You can win too!

The Presentation

There are multiple variations, but a typical presentation is that you respond to a letter in the mail by calling a toll-free number.  The person on the other end of the line, whose voice is filled with excitement, says something like, “Today is your lucky day!  The company has reserved numbers for you.”  They imply that you will get the winning numbers that will allow you to collect $400,000 (the number varies).  All you have to do to claim this winning number is wire transfer a “processing fee.”

The Result

The result is you wire the money to Canada or Spain or the Virgin Islands and you never receive your check for $400,000 nor do you ever hear from them again.

How to Avoid It

Ask yourself one simple question when you hear this pitch, if a company or anyone had the ability to select the winning lottery number, why would they give it to you for a fraction of the winnings?  Even though it seems like no one would fall for this, thousands and thousands of people do fall for it each year throughout the U.S.  The Federal Trade Commission (FTC) has these words of caution for consumers who are thinking about responding to a foreign lottery:

There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none.

If you purchase one foreign lottery ticket, you can expect many more bogus offers for lottery or investment “opportunities.”  Your name will be placed on “sucker lists” that fraudulent telemarketers buy and sell.

Keep your credit card and bank account numbers to yourself.  Con criminals often ask for them during an unsolicited sales pitch.  Scammers will use this type of information to empty your bank accounts.

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Identity Theft

The fraudulent use of your identity to get cash, credit or merchandise is the fastest growing financial crime in America. Older people make up a significant percentage of the millions of Americans who are victims of identity thieves each year.

According to the Federal Trade Commission, identity theft targeting people over the age of 60 jumped from 1,800 cases in 2000 to almost 6,000 the following year.  Most of those cases involved the use of Social Security numbers.

A convicted identity thief in our state recently said that 80 percent of her victims were seniors.  The reason was that seniors often have better credit, and retirement communities are easy targets.  Clicking on the following link will provide you with more information about identity theft. www.consumer.gov/idtheft/

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Internet Scams

According to research by AARP, senior citizens are the fastest growing segment of the Internet community. It is estimated that 27.3 million seniors are Internet users, up from 10.7 million in 1999.

Seniors say that keeping in touch with others remains the top reason for using the Internet. But seniors increasingly are turning to their computers to shop and conduct business.

And people 50 and older are an increasingly popular target for marketers.  Unfortunately, some of those people are con criminals who use the Internet to scam millions from unsuspecting victims. Given the newness of the Internet, these scams continue to develop and grow.

By visiting the Federal Trade Commission website at www.ftc.gov/ftc/consumer.htm you can learn about some of the more common scams and how to protect yourself.

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Home Improvement Schemes

Each year when the weather turns nice, itinerant crews of roofers, pavers and day laborers travel from city to city, driving through neighborhoods and mobile home parks looking for victims.  Sometimes they “offer” to pave your driveway, repair your roof, or paint your house with supplies “left over” from another job.

This is just a scam.  The repair work is completed very quickly, the quality is poor and the “repairs” usually cost more than the original estimate.

Warning Signs

• The repairperson drives an unmarked truck or van with an out-of-state license.
• The worker has no business identification, local address or telephone number.
• You are offered a “special price” if you sign today.
• The worker wants upfront cost or fees, or accepts only cash.
• No written estimates or contracts are provided.
• The worker does not have any references.
• The offer sounds “too good to be true.”

Generally, work that “adds to or subtracts from real estate” requires a registered contractor.  Businesses that provide services such as gutter cleaning, pruning, lawn care or window washing do not need to be registered.

If you are planning to hire a contractor, make sure the contractor is registered and bonded.  Check the contractor’s references.  Solicit several written bids.

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Investment Scams

In this scam, the criminal contacts you with a great investment plan. While the specific details of the plan can vary depending on who is delivering the pitch, one thing is certain: it is a bad investment for everyone but the criminal.

The Opening Pitch

There are many approaches to selling investments. One example is to offer a free analysis of your investment portfolio. Others have sent out mailers offering incredible returns on such investments as gold coins, promissory notes secured by deeds of trust and even something called “viaticles,” which literally is buying the payments on a life insurance policy for someone who is about to die.

The Presentation

The presentations always talk about three things: your return or profit on the investment, how safe it is, and how easily can you get your principle back if you need it.

The pitches often tie into something going on in the news. So for instance, when there is a war or some kind of international unrest, the con criminal will exploit that to sell gold coins, saying something like, “Mr. Prospect, during periods of economic unrest, what kind of investment can you count on? You cannot count on the stock market or the financial markets. The one thing that will be there for you, no matter what, is precious metals and there is no more precious metal than good, old-fashioned gold.”

Therefore, the scammer sells you a gold coin for $3,000 that he bought for $300 and claims it will be worth $6,000 in five years.

How to Avoid It

Consider following the three C’s before you make a buying decision: compare, consider and consult.

• Compare : Whenever an investment salesperson presents an opportunity to you, before you buy, compare that investment to other opportunities from other firms. So for instance, before you invest in a money market certificate at one bank, compare the rates at two other banks.
• Consider : Never make a buying decision at the time of the sales pitch. Always give yourself time to consider whether it is a good deal.
• Consult : While you are considering the investment, consult with someone whose opinion you trust and find out what they think of the investment.

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Living Trusts

The living trust scam attempts to get you to purchase a trust.  It plays on the fear that probate costs and estate taxes will erode the value of your estate.  While living trusts can be a useful tool for some, many unscrupulous sales persons use it to simply get in the door and sell high-commission investments to consumers, whether or not it is the best thing for them.

The Opening Pitch

“Do you want to leave a legacy for your grandchildren and not have the government take all the money you have spent a lifetime saving?  Come to a free seminar to learn how.”

The Presentation

You respond to such a mailer, phone call or advertisement by attending a workshop. Or you might call to find out about it and someone will come out to your home to present information.  They will sign you up for a living trust by having you fill out forms that disclose all of your financial assets.  Once they have seen your finances, they begin to recommend different investments, usually insurance type products like annuities, in order to earn high commissions off the sale of those products.

The Result

Sometimes the living trust document you buy is not filled out properly because lawyers are not doing it. If these documents are filled out improperly, you may end up going through probate anyway, the very thing you were told you could avoid. In addition, many older people end up buying investments that are not appropriate for them given their situation.

How to Avoid It

If you want to know if a living trust will truly help you, you should get the advice of an estate-planning attorney.  You can find the name and phone number for such an attorney by calling your local bar association, lawyer referral service.

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Sweepstakes Scams

In this scam, the con criminal makes you think you have won a great prize or sweepstakes.  However, there is a catch: to claim your prize, you need to pay some fee or purchase some merchandise. In reality, there is no prize, and the criminal pockets the fee.

The Opening Pitch

Sweepstakes scams usually start with an over-sized envelope in the mail.  It will have your name printed all over the material as being a potential (or an actual) winner. Such direct mail letters will often have the pictures of past winners describing how wonderful their lives are now that they are millionaires.

In another variation, a fraudulent telemarketer may call your home and tell you, in the most excited voice imaginable, that you have won a big prize. He or she may say something like this: “Congratulations, you are our big prize winner in our biggest prize giveaway ever.”

The Presentation

As you read further in these mailers, you realize they are selling merchandise of all kinds.  The message is clear: the more merchandise you buy, the more likely your chances of winning.  While the mailings do not directly say this, they definitely imply strongly that your chances of winning increase as you buy more merchandise.

In the telephone version, the criminal will tell you that in order to claim your prize, all you need to do is to send in a cashier’s check or your credit card number to cover a small fee associated with handling and delivery, postage, insurance, foreign taxes, or some other false reason.

The Result

Many, many consumers and especially older consumers have been hooked on these scams, often spending thousands of dollars on merchandise they did not really need but thought would improve their chances of winning. What hooks many people into habitually being duped with these scams is the dream of winning. They think, “Maybe this time I really did win.”

How to Avoid It

The key thing to remember about sweepstakes is the chances of you winning are about the same as being struck by a bolt of lightning. Buying merchandise from a company that uses sweepstakes as a promotion does not improve your chances of winning. Furthermore, it is illegal for any company to require you to make a purchase or spend money in order to play the sweepstakes they are running.

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Travel Scams

“Congratulations!” You are one of our lucky winners for a week-long luxury vacation to the beautiful and sunny beaches of Puerto Vallarta.”

You have just been targeted for a travel scam.   Older adults are common targets since they have more disposable income and travel a lot.

So before you give up your credit card number, dial for reservations, or respond to an enticing email use extreme caution.

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