The scams that cash in on greed

Nick Morrison looks at the scams, cons, frauds and just plain money-making schemes in circulation.

THE problem with fraud is that no one likes to admit they've fallen for it. A proposal that seems such a good idea at first, suddenly becomes the most obvious scam in the book - once you've handed your money over. Precautions that seemed excessive, suddenly become common sense - once the cash has drained from your account. It's the crime that leaves its victims feeling ashamed.

Much of the reason is that so many cons prey on that most basic of human emotions - greed. The temptation to make a quick buck, with minimal effort, proves all too much, particularly if we can get away with no one finding out our weakness. So when it all goes wrong, it seems best to lick our wounds in secret.

Cons are nothing new, of course. As long as people have been greedy, other people have exploited this to satisfy their own greed. Many of the scams now being reported to the police have been around for some time, but there are always new ones springing up.

THE CLAIRVOYANT

A scam which seems to have arrived in the North-East this year, this sees the victim receiving a letter claiming they have been the subject of a vision. This vision reveals both that the victim could be harmed by someone close to them, and that they are in line for a big cash win. Of course, to avoid being harmed and to get the money, the victim needs the clairvoyant's help, for a suitable fee.

In one letter, the victim is told: "Without my protection, you could not only become a victim of a person close to you, without even realising it, but also pass up the chance of winning a fabulous sum of money," in this case £83,000. To benefit from the protection, and for the lucky numbers which will unlock the £83,000, the victim need only send the "modest" sum of £13 to a PO Box.

The problem with this, says Det Insp Colin Gibson, head of Durham Police's economic crime unit, is that if the "clairvoyant" claims he is offering a genuine service, it is difficult to prove otherwise. Lucky numbers may turn out to be not so lucky, but, hey, sometimes even clairvoyants get it wrong.

THE SCRATCHCARD

Another scheme which has become common over the last few months, this sees scratchcards holding out the promise of fabulous prizes. All the recipient has to do is ring a special number to find out what they've won and how to claim their prize. The downside is, this number is a premium rate line, and callers will be charged anything up to £2 a minute to discover they're about to receive a pen.

A worrying development on this theme, is when callers are asked to provide their bank details, so their win can be transferred into their account. Once these details are handed over, the account can then be safely drained. And an added complication is that some scratchcards do offer genuine prizes.

"We're warning people to be careful of them. Unless they are absolutely certain of what they're doing, they should throw them in the bin, and they should certainly avoid giving out their bank details," says Det Insp Gibson.

PYRAMID SCHEMES

An old favourite, the latest variation is said to have been originated by one David Rhodes. Recipients typically get a letter with a list of ten names, and are asked to send £10 to the person whose name is at the top of the list, then take the top name off, add their own name at the bottom, and send the letter on to a specified number of other people.

In theory, this will lead to your name reaching the top of the list on thousands of letters, and so triggering an avalanche of £10 notes to start pouring through the letter box. In practice, it doesn't work.

"The theory is sound, but they very quickly implode, and the only people who make any money out of it are the people who start them off," says Det Insp Gibson. "I don't believe it is ever intended to work; it is intended to fool vulnerable people into thinking they can make a lot of money very quickly."

Despite this, even if the scheme's originators can be traced, it is not illegal: it is possible to claim that it is all done with the purest of intentions.

THE CANADIAN LOTTERY

Another recent variation on a familiar theme, this sees victims getting a letter saying they have won a prize on the Canadian lottery, and all they have to do to claim their winnings is send an administration fee, of £10-£30.

There is an obvious sign that this is a scam: to win a lottery you have to buy a ticket. If you haven't bought a ticket for the Canadian lottery, then you won't have won.

Again, a more sinister development is that the "winners" have sometimes been contacted by phone and asked to supply their bank details so the prize can be paid direct. Genuine lottery companies will not need your bank details to hand over the prize. The Office of Fair Trading and Interpol are trying to trace those responsible for this fraud.

But there are genuine competitions which offer unsolicited prizes, the most well-known being Readers Digest, when the prizes are an inducement to take out a magazine subscription. But while these are safe, competitions and prize draws which require money to be handed over before the winnings can be collected are the ones to avoid.

THE LEBANESE LOOP

A common fraud in other parts of the country for some time, this now seems to be infiltrating the North-East. Thought to originate in Lebanon, hence the name, this sees a plastic loop inserted into the slot in a cash machine.

When an unsuspecting member of the public tries to use the machine, they find their PIN number won't register, as the loop is stopping the machine from reading the card. And when they try to remove their card, it refuses to come out, again because it has not been registered in the first place.

Throughout their ordeal, the punter's frustration is compounded by the arrival of someone waiting to use the machine. But this is a member of the gang, indulging in a little 'shoulder surfing': peering over their shoulder to try and read the PIN number. Once the punter leaves, believing the machine to have swallowed their card, the loop and card are removed, and the gang get to work taking out as much money as possible before the card is cancelled.

But according to Det Insp Gibson, even a cursory examination of the cash machine will reveal that all is not as it should be. And if you do believe your card has been swallowed erroneously, it should be possible to remove the plastic front of the cash machine slot to retrieve the card.

PLASTIC CARD CRIME

Anyone who has legitimate access to your card, has the potential to leave you hundreds, if not thousands, of pounds worse off. Using a machine no larger than a pager, the card is 'skimmed', recording the details on the magnetic strip. This information is then 'cloned' on to other plastic cards, which are then used in other shops or restaurants, with the bill charged to the original card.

Unfortunately, with so many transactions now involving plastic, the number of people who come into contact with our cards is astronomical, and the only real precaution, according to Det Insp Gibson, is to keep an eye on your card.

419 FRAUDS

One of the most common frauds, this is named after the section of the Nigerian penal code which it contravenes, the scam having originated in West Africa. Victims typically receive a letter purporting to be from a relative of a deceased royal/wealthy businessman, who has amassed a small, or sometimes large, fortune. If only someone could help them get this money out of the country...

In exchange for helping move the cash, for which you will need to supply your bank account details, you will be entitled to a share of the fortune. Sounds perfect. But if you send your account details, you will quickly find your savings have disappeared.

"These letters literally come in their tens of thousands, and nationally we're talking about millions of pounds lost to the economy," says Det Insp Gibson. Some victims have even been tempted to travel overseas to help the money transfer to through - they have been lucky to escape with their lives, after being kidnapped and held ransom.

DATA PROTECTION REGISTRATION

Not so much a fraud, more a way of getting you to hand over money needlessly. Companies contact small businesses, saying they haven't registered with the Information Commissioner, formerly the Data Protection Registrar, but for a small fee, of around £100, this company can register on their behalf.

The complication is, that some businesses do have to register, for an annual fee of £35.

"What they're doing isn't strictly illegal, but the concern is they're implying the represent the Information Commissioner, which isn't true," says Det Insp Gibson. "They are providing a service, but instead of paying a registration fee of £35, businesses are being asked to send up to £100."

But while these may be the scams and tricks du jour, as soon as one is uncovered, another two spring up to take their place. Wherever there is greed, there is an opportunity to lure the foolish and the gullible, as well as the unsuspecting, into handing over their money. "A lot of it is thinking you are going to get something for nothing," says Det Insp Gibson. "But in my experience, that doesn't really happen."