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An Arizona company was fined $5.2 million for selling worthless services to victims of earlier scams that the company claimed would get their money back, the Federal Trade Commission announced Wednesday.
The FTC fined Business Recovery Services LLC and its owner Brian Hessler, who sold “worthless do-it-yourself kits” for $499 to people who had lost money to work-at-home schemes, the FTC said.
“In effect, this scheme rubbed salt in the wound of people who had already been victimized, targeting them and defrauding them all over again,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement.
The $5.2 million fine was stayed so long as Hessler pays $90,000.
Don’t be fooled by ads that sounds too good to be true on sites like Craigslist or Ebay, said Attorney General Lori Swanson’s office in her monthly consumer warning.
Personally, I love Craigslist. Every apartment I have lived in was found on Craigslist, and I bought a pretty cheap Nintendo DS on the site about a month ago.
But I also almost feel for a few scams. About a year ago, I really wanted a Maltese puppy and a woman on Craigslist claimed she was giving one away because she was moving, and her new landlord did not allow pets. All she asked was that I pay the cost of shipping the dog from California to my home in Texas.
She asked that I wire the money to her, and of course, that’s when I grew suspicious, especially since the money was headed to a country in Africa. Thankfully, that’s where our “business” ended.
Swanson warned that is one of the most common ways people get scammed on sites like Craigslist.
“Citizens who are asked to wire or otherwise submit payment to a party in another country who they do not know should exercise great caution, as this is a primary red flag for potential Internet classified scam,” Swanson said in her warning.
Other red flags, according to Swanson:
A bogus kidnapping ring based in California allegedly defrauded at least one Minnesota woman after she was told that her husband had been smuggled into the United States and was told to wire $2,000 for his release, according to court documents unsealed last week.
Four people were indicted and three were arrested in San Diego last week. The charges against Ruth Graciela Raygoza, Maria Del Carmen Pulido Contreras, Adrian Jovan Rocha and Jonathan Rocha says they falsely reported that they were holding a family member and demanded money for the safe release of their relative.
The group received at least five money transfers from people living in Maryland, Virginia and Minnesota.
The Minnesota woman, identified only as E.D. in the complaint, was contacted in August 2012 and told her husband “had been smuggled into the United States.” She was instructed to wire $2,000 to Adrian Rocha.
According to the complaint, Rocha picked up the transfer in the San Diego area and then “traveled to a location near the border in San Ysidro, California and handed money to a conspirator who delivered the money to another conspirator in Mexico.”
The Associated Press reported that scammers mostly targeted immigrants, and dialed random phone numbers to reach them.
"They would just randomly run through a sequence of numbers, like 1 to 100," Daniel Page, assistant special agent in charge of U.S. Immigration and Customs and Enforcement's Homeland Security Investigations unit in San Diego told the Associated Press. "They're just like your professional telemarketer. They have a script. 'You need to pay this money. If you don't, something's going to happen.'"
In a "sophisticated phone scam," fraudsters are telling consumers they owe money to the IRS and it must be paid through a pre-loaded debit card or wire transfer, the Internal Revenue Service said last week.
The IRS warned consumers that the scam is hitting "nearly every state in the country."
“If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.” Acting IRS Commissioner Danny Werfel said in a news release.
The IRS noted that the first IRS contact on a tax issue is likely to occur via mail.
If you've been the target of this scam, the IRS recommends contacting the Federal Trade Commission using their "FTC Complaint Assistant", and add "IRS telephone scam" in the comments of the complaint.
Consumers who like to shop may be enticed to enter a secret shopping program, but the Better Business Bureau says mailings attempting to introduce people to mystery shopping are usually bogus.
Typically marketing companies businesses hire secret shoppers to evaluate the customer service or to gather information on a specific product. For example, a clothing store may want to ensure their employees are asking customers to sign up for a store credit card, so the company may hire secret shoppers who will go the store and then answer a survey.
The BBB of Minnesota and North Dakota said some secret shopping schemes look official because the scammers mail real-looking checks from legitimate businesses, sometimes sent via UPS or FedEx.
"The checks are bogus and these businesses have no association with these schemes," the BBB said in a news release Tuesday.
Firms do not typically send out checks to lure in potential secret shoppers,according to the BBB. "At best, being a secret shopper offers supplemental income."
The BBB advises visiting the Mystery Shopping Providers Association website, mysteryshop.org, for a list of reputable mystery shopping companies.
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