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Welcome
to DTI's 'Don't be a mug!' web site - a consumer's guide to scams
and rip-offs.
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 Investment
Scams Awareness Campaign. It
is estimated that around £350m, much of it from people's life
savings, has been lost to scamsters offering overpriced goods
or commodities as 'investment opportunities'. The DTI,
assisted by consumer champion Alice Beer, have launched an
awareness campaign to help the public recognise such
scams. Read case studies and find out how to detect and avoid investment
scams here. |
INDEX
INTRODUCTION
"Congratulations,
you have won, just send a processing fee to…"
"You must respond at once to claim your prize…"
"Simply provide details of your credit card or bank account…"
"An opportunity to invest in a syndicate to win a high-stake
lottery…. "
"I made thousands of pounds in the first few months and you can
too…"
These are just
some examples of approaches used by the operators of scams. Scams
succeed for two main reasons:
• They look
genuine, creating the impression that they can fulfill people's
needs or desires.
• Scams are
manipulative and designed to produce automatic responses (e.g.
sending an unsolicited "gift" to create a sense of
obligation, or sending a hard luck story to prey on people's
sympathy).
Scams are
assisted by the common belief that all companies or businesses must
be legitimate because they are subject to vetting by
government agencies. Unfortunately this is not the case. The Office
of Fair Trading and local Trading Standards Departments are always
looking out for bogus schemes but they can usually only take action
once scams are reported to them. (Tip
them off)
Another common
belief is that there are shortcuts to making large amounts of money
which only a few "experts" know about. Once again, this is
not the case.
The operators of
scams are ingenious, persuasive, persistent and even aggressive in
pursuit of easy opportunities to take people's money. They are also
mobile. It's not unusual for a scam operation to be closed down in
one country and reappear, perhaps under a new name, in another.
Scams take a
wide variety of forms and they may target consumers or businesses.
Although there are some generic forms of scam, new variations appear
regularly to evade enforcement or exploit new opportunities.
There is
extensive legislation in the UK, often supported by codes of
practice, to protect consumers in areas such as the sale of goods
and services, shopping by mail order, advertising, unsolicited goods
and financial services.
Moreover, all schemes where money changes
hands are likely to be subject to the general criminal law on fraud,
theft, and deceit.
However, many operators of scams are ingenious
enough to operate within the boundaries of the law. Even if they
don't, effective enforcement may put a stop to their operation but
frequently does not mean that their victims can recover their money
Legislation and
effective enforcement can only provide part of the defence against
scams. The best defence is a high level of awareness and scepticism
on the part of the public. Awareness of the risks and warning signs
will reduce the chances of being taken in. And every refusal to be
taken in deprives a scam operator of money they don't deserve.
The guidance
which follows is intended to help consumers be prepared and so
reduce the possibility of them becoming scam victims.
Acknowledgement. The DTI is
grateful to the Australian Ministerial Council on Consumer Affairs
(MCCA)
for permission to reproduce material from The Little Black Book of
Scams (© Commonwealth of Australia 1999).
Disclaimer. The information
provided in this guide is advisory only. It is not to be taken as a
statement of law and must not be construed to waive or modify any
legal obligation.
 Next
Page - unsolicited gifts and prize draws
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