2012's Worst Scams
Elliot, Christopher, Newsweek
Byline: Christopher Elliot
Last year people lost billions to identity theft and deceptive debt collection.
for one California retiree, the worst scam of the year was the one that cost her $30,000--extracted payment by payment from fraudsters who persuaded her that she'd won more than $2 million in a lottery.
"They called my home number constantly," she says. "They were so persistent. They promised me the money was waiting, and all I had to do was pay the taxes on it."
The woman, who asked that her name not be used, reluctantly withdrew cash from her bank and wired it overseas, always to a different person. When the funds ran out, she asked her credit card for an advance. By the time her children discovered the questionable transfers, the scammers had vanished, along with Mom's money.
A recent survey determined that so-called "419" scams such as the ones she fell for--named after the article in the Nigerian criminal code dealing with fraud--cost consumers $9.3 billion a year worldwide. But it doesn't rank as the top scam of 2012. That dubious honor goes to identity theft, which, at around $48 billion a year, has been America's biggest and costliest scam for more than a decade and is unlikely to relinquish the top spot anytime soon.
Scams were everywhere in 2012, according to consumer advocate Mitch Lipka. "There was no sign of letup," he says, and adds, "Tragedies, disasters, and consumers' struggles continued to be angles for scammers to rip off consumers."
Although there's no authoritative list of the top consumer scams, information collected through the federal government and advocacy groups such as the Better Business Bureau suggest these are the top "gotchas" of 2012:
id theft. Identity thieves steal your bank, credit-card, and Social Security information and then open accounts and apply for credit cards in your name. It's so popular, they even made a movie about it--appropriately called Identity Thief. The latest targets appear to be kids, whose Social Security numbers are being ripped off and then repurposed by scammers. These scams are particularly troublesome, because it often takes years for the crime to be discovered.
how to avoid it: Don't give personal information to anyone, for any reason, and monitor your credit-card and bank accounts regularly for any suspicious activity.
lottery and sweepstakes scams. The California victim is just one of hundreds of thousands of Americans who fall for a …
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Publication information: Article title: 2012's Worst Scams. Contributors: Elliot, Christopher - Author. Magazine title: Newsweek. Volume: 161. Issue: 01 Publication date: January 4, 2013. Page number: 1. © 2009 Newsweek, Inc. All rights reserved. Any reuse, distribution or alteration without express written permission of Newsweek is prohibited. For permission: www.newsweek.com. COPYRIGHT 2013 Gale Group.
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