Don’t Be a Victim of Consumer Fraud
Money Management – October 2008
Consumer fraud is big business. An estimated 13.5% of American adults were identified as fraud
victims in one study by the Federal Trade Commission. There are many different types of crimes
involved, including tax refund scams, fraudulent weight-loss programs, phony lottery or prize
schemes and bogus work-at-home scams. You don’t have to be a victim, however. The Missouri
Society of CPAs recommends steps you can take to avoid consumer fraud.
DON’T BE TAKEN IN BY APPEARANCES
Scam artists and phony organizations are very good at presenting a professional image. The
person at your door may be clean cut and friendly, the voice on the phone may be well spoken and
the mail offer you receive may be glossy and appealing. The person you speak to may also have
very reasonable answers to any tough questions you ask. In some cases, the group that he or she
represents may have a name that is similar to a well-known business or charity, making it seem as
though they are affiliated with a legitimate organization. But remember that looks can be deceiving,
and don’t make any decisions or commit any money based on a good first impression alone.
BEWARE OF HIGH-PRESSURE TACTICS
Con artists like to take the money and run. If you’re being pressured to sign up or commit money
immediately, then that’s a warning sign of possible consumer fraud. Instead of committing yourself
right away, take the opportunity to consider the offer. Scam artists don’t want you to do this,
because you may start to ask too many questions. But you should take time to be sure you
understand what kind of commitment you’re making and how credible the offer seems. Consult
experts, including your local CPA, an attorney or bank officer, for their advice.
GET IT IN WRITING
Don’t commit immediately to an offer made over the phone or in a door-to-door solicitation. Ask for
some kind of documentation describing the offer being made, then read the materials and make
sure you understand them.
Someone representing a legitimate organization should be able to provide references or some
other verification about the group and what it does. Ask also for contact information where you can
call the person making the offer. If they’re reluctant to provide this information-—or if they insist that
they’ll call you instead-—you have good reason to be suspicious. However, don’t assume that
someone who does supply contact information is necessarily reliable. They may simply be a con
artist with a cell phone.
NEVER MAKE A PAYMENT UP FRONT
In many scams, the thieves insist that you have won a prize, can have a new credit card or might
qualify for a guaranteed job—if you turn over a fee in advance. Legitimate businesses do not ask
for processing fees up front for prizes or business opportunities, so this request is a sure warning
sign of trouble.
TURN TO THE FTC
The Federal Trade Commission is a great resource for questions about possible consumer fraud.
You can find information on their Web site on www.ftc.gov or call 877-FTC-HELP (877-382-4357).
ASK YOUR CPA
Your local CPA can work with you to consider any questionable offers you receive and help you
spot possible fraud. Consult him or her on any financial question facing you or your family. To find a
CPA near you, visit http://www.mocpa.org/public/referral/findcpa.aspx.