How to protect yourself against scams | Unsolicited prize draws | Clairvoyant or Psychics scams | Miracle lotions | Out of Africa scams | Premium rate telephone numbers | Telephone and text message | Telemarketing | Unsolicited gifts | Trading schemes | Home employment opportunities | Invention promotion firms | Vanity publishers

Scams are numerous and varied. Fraudsters operate from within and outside the UK. Anyone can be a potential victim. Always be on your guard and remember, if it sounds too good to be true it probably is!

How to protect yourself against scams

Scams can take the form of unsolicited prize draws, miracle lotions, pyramid selling or numerous other examples. Further details are below. You can reduce your chances of being a scam victim by following this simple advice.

• Read letters, circulars, brochures and e-mail and text messages carefully and seek professional help (e.g. an accountant or a solicitor) if significant money, time or responsibilities are involved.

• Don‘t provide any financial or other personal information before you establish whether the company or individual is legitimate.

• Don‘t judge the credibility of a company or sales person by how “professional” they or their promotional material or web site seems.

• Don‘t fall for high-pressure sales tactics or put yourself in a situation which might make you vulnerable.

Further advice is on the Department of Trade and Industry website.

Unsolicited prize draws, lotteries and windfalls

Many common scams take the form of prize draws or lotteries and may originate from within or outside the UK. More often than not, there is no prize or reward on offer, or else the prize is worth less than the requested fee.

The Department of Trade and Industry website has information on postal scams and the leaflet ''Prizewinner or prize fool?'' explains how to avoid becoming a scam victim and the warning signs to watch out for.

If you are unsure about any mailing you have received you can check if the company is a member of the Direct Marketing Association. Their members have to comply with a strict code of practice.

If you decide that the mailing is suspect, throw it away or send it to the Office of Fair Trading who are investigating such scams. The address is:

The European Enforcement Team
Office of Fair Trading
Fleetbank House
2 - 6 Salisbury Square
London
EC4Y 8JX

e-mail: euroteam@oft.gsi.gov.uk

Or you could inform your local Trading Standards Department. Look in the phone book under ''local authority'' or you can enter your post code on the Trading Standards Institute website to find your nearest office.

If you prefer, you can submit your complaint online to your local Trading Standards Department via the Consumercomplaints website or the Ripofftipoff website, which allows you to anonymously report a trader you think may be 'ripping off' the public.

You can register your wish not to receive unsolicited messages by mail, fax, e-mail and telephone by contacting  the Direct Marketing Association’s Preference Services.

To stop receiving unaddressed leaflets delivered by the Royal Mail you can write to:

       Royal Mail Door-to Door Service
       Freepost
       Beaumont House
       OX4 5BR

Telephone: 0845 070 0702

Clairvoyant or Psychic scams

These imply that you can receive good luck by paying for advice or some form of charm. They may also offer a gift in return for a prompt reply. Anonymous "endorsements" from people whose lives are claimed to have been changed may be included.

In some cases, these scams adopt a more aggressive tone, suggesting that you will actually experience some misfortune if you do not send the money requested.

Scams of this nature should be treated in the same way as unsolicited mailings for prize draws and lotteries.

Miracle lotions

Beware of any exaggerated claims such as “instant cures for arthritis”, “lose weight without effort”, “grow hair overnight”, or “look years younger.”

These pills, lotions and creams are sold by professional fraudsters with no medical training. Sales gimmicks include fake testimonials from “satisfied customers”, emotional sales pitches, and outright lies about the effectiveness of the product.

If you have any doubts about a product that someone is trying to sell you, discuss it first with your doctor or other informed health professional.

Out of Africa scams

The 'West African' scam is also known as the '419' advance fee fraud. The scam is based on the premise that some major event, such as the overthrow of a government, has resulted in large sums of money being held in a country by a person or persons who are seeking help in transferring the money overseas. A proportion of the money is offered for help to arrange the transfer.

Victims may be approached by letter or e-mail. Anyone who responds receives another letter asking for money for a last minute bribe. Inevitably, having parted with their money, they never hear from their African contact again.

The Metropolitan Police website has more details about these scams and what you should do if you are contacted.

Premium rate telephone numbers

Fraudsters use high cost of premium rate telephone numbers for many different scams, including bogus competitions, prize and holiday offers, and deceptive credit card promotions.

The scams may begin with notification that you have won something or have qualified for a credit card. You are likely to have to listen to a long recorded sales message or answer a long list of questions whilst being charged at a premium rate for the call.

If you have a complaint against a company you can ask ICSTIS (the Independent Committee for the Supervision of Standards of Telephone Information Services) to investigate. It has the power to fine companies and bar access to services.

Telephone and text message scams

The widespread use of mobile phones and text messaging has provided another opportunity for scam operators.

You may be offered a prize of a holiday, but calling the quoted phone number will mean paying for a lengthy premium rate telephone call. Any holiday on offer, if there is one, is likely to be subject to terms and conditions which make it worthless to the vast majority of people.

The same risks and warning signs apply to telephone calls and text messages as to any other form of unsolicited approach offering money or prizes.

You can register your wish not to receive unsolicited telephone sales calls by contacting  the Telephone Preference Services.

Telemarketing scams

Some scam artists tell consumers that according to a new law, people are now liable for all unauthorised charges on their credit card account. This is not true. If you did not make the authorised charge, do not pay it. Follow your credit card issuer's procedures for disputing charges you have not authorised.

The ''advance fee'' credit is another type of scam. Advertisements suggest that a loan will be granted, regardless of your credit history, but you have to pay a fee first. Despite paying a fee the scam artist takes off with your money and the loan never materialises.

Legitimate guaranteed offers of credit do not require payments up front. It is illegal for companies doing business by phone to promise you a loan and ask you to pay for it before they deliver.

Unsolicited gifts

Some companies send "gifts" such as ballpoint pens, key chains, books, recipe cards, through the mail without them being ordered.

It is a criminal offence to demand payment for unsolicited goods from a consumer. Any goods delivered can be kept, without charge, by the consumer. Further guidance on dealing with unsolicited goods can be found on the Department of Trade and Industry website.

Trading schemes

Trading schemes (also known as direct selling schemes, network marketing, multi-level marketing and other names) are a legitimate form of business activity. They offer individuals the opportunity to earn money by selling the scheme's goods or services from home.

In some schemes, members may earn additional commission by recruiting others to the scheme and from sales by their recruits. However, there are legal requirements that the schemes must comply with - details can be found on the Department of Trade and Industry website.

Trading schemes become illegal when they claim to trade in goods or services but their real purpose is to generate money by recruiting new participants. This is often referred to as "pyramid selling" (but not all "pyramid" schemes are "pyramid selling").

It is worth checking whether the operator of a trading scheme is a member of the Direct Selling Association (DSA), which is a trade association for the direct selling sector. The DTI's guidance booklet ''The Trading Scheme Guide'' outlines the current legislation in the UK and offers advice to potential participants.

Pyramid schemes and chain letters

Pyramid schemes may not claim to trade in goods or services but require members to pay to join and then recruit others, who also pay. If enough new members join, the pyramid will grow enabling some participants to make money. But, since the number of new participants is finite, each new participant has less chance of recruiting others and a greater chance of losing their money.

Pyramid schemes may take the form of, or operate in the same way as chain letters. Some chain letters may be illegal under the Lotteries and Amusements Act 1976. The law in this area is complex and only a court can say authoritatively whether a particular scheme is unlawful. More details can be found on the Department of Culture, Media and Sport website.

Home employment opportunities

Beware of advertisements that make extravagant claims about job opportunities or potential earnings. Some promotions stress that “no experience is necessary”, while others indicate that “no investment is required'. Be suspicious if you have to pay a fee to receive more information about working from home.

If you are looking for work to do at home you should consider writing to or approaching local companies who may be able to offer this type of work. Genuine employers will not ask for money in advance before providing you with work.

The Department of Trade and Industry and the National Homeworking Group websites have advice on homeworking schemes and what you should do if you are a victim of a scam.

Invention promotion firms

Advertisements for invention promotion firms target independent inventors with offers of free information on how to patent and market their inventions and so earn income from royalties.

Some unscrupulous promotion firms charge thousands of pounds to evaluate, develop, patent, market and license inventions to manufacturers, subject to a fee of several thousand pounds in advance. Once you have paid up they then do little or nothing for you.

If you are approached by an invention promotion firm, you should be very wary and question claims and assurances that your invention will make money. No-one can guarantee your invention's success.

Contracting for the services of one of these companies is no different to any other major financial transaction. Make sure your contract contains all the terms you agreed to and be sure to take independent legal and financial advice.

Vanity publishers

Advertisements for what are commonly known as ''vanity publishers'' target authors with offers to turn their manuscripts into successful published books.

Due to the costs involved in editing, publishing, advertising and marketing, a reputable publisher will be quite honest when assessing the commercial viability of a manuscript from an unknown author.

However, some publishers offer to publish and market manuscripts for a fee in advance. Unfortunately, the authors may get little or nothing in return. The reality is likely to be publication of a relatively small number of copies of the manuscript and no real effort at marketing the published book.

Contracting for the services of one of these companies is no different to any other major financial transaction. Make sure your contract contains all the terms you agreed to and be sure to take independent legal and financial advice.

Last updated: 18 March 2004