Need extra cash for the holidays? Beware of online payday loan offers – National Consumers League

With increased expenses around the holidays, consumers may find themselves running short of cash for other bills, and some may be considering payday loans to cover the short-term need. Thinking about a short-term loan? Better think twice.These days, a payday loan is only a mouse click away thanks to the proliferation of online payday loans. While even legitimate payday loans should only be considered as a last resort due to their extremely high interest rates, we are seeing a large number of reports about payday loan companies that are nothing but scams.

The scam works like this: A consumer in search of an online payday loan sees an ad online, on a newspaper classified page, in an email, or somewhere else. The ad guarantees a payday loan without a credit check. The consumer is directed to a Web site that looks very official and legitimate. They are instructed to enter in personal information, presumably to begin the loan application process. In some cases, the scammers have even posted fake video “testimonials” online to make the scam seem more legitimate.

Once the personal information is entered, the consumer is contacted by the alleged payday lender (in reality, a scammer) and asked to send money to cover fees “before the loan can be processed.” The scammers claim that this money is necessary to pay for things like “application fees,” “insurance,” “taxes,” or other important-sounding costs. If the victim sends the money, they are typically contacted again with another ask for additional money for other fees before the loan can be processed. This sequence may continue until the consumer catches on to the con or runs out of money.

Here are a few tips to help you spot and avoid these scams:

  1. If you are asked to pay money to get money, it’s probably a scam. While most legitimate payday lenders charge a (typically hefty) fee, this is generally assessed when the consumer repays the loan. Requests for up-front fees before a loan can be granted is a sure sign that something is fishy.
  2. If you’re asked to wire money or use put money on a prepaid card before your can get a loan, it’s a scam. Consumers report that online payday loan scammers usually ask to have the fictitious “fees” wired via Western Union or Moneygram. Increasingly, scammers are also telling victims to load funds on a prepaid card (such as a Green Dot MoneyPak) and then either send the card to the scammer or give out the access code on the back of the card. In either case, the scammer gets cash from the money order or deducts the cash from the prepaid card and the victim gets nothing.
  3. If the online payday lender says they don’t need a credit check and then asks for sensitive personal information, it’s probably a scam. Many online payday lenders advertise that they do not require a credit check or other documentation of the borrower’s credit-worthiness. However, they then require the victim to enter sensitive information such as a Social Security Number online to apply for the loan. In reality, this information is used to target the consumer with even more bogus offers, or worse.
  4. Just because an online payday lender looks legitimate doesn’t mean that it is. Online payday loans scam artists are experts at setting up legitimate-looking Web wesites, providing official-looking documentation and even creating dummy business addresses. Consumers who are unfamiliar with the company should not simply rely on these materials. Do your own due diligence by checking with state banking regulators, the Better Business Bureau, and the state corporation commission to make sure the business is legit.
  5. If you’ve been approached by or lost money to an online payday loan scam, report it! These scams defraud consumers from every walk of life every day. Scammers count on their victims being too embarrassed to report the crime. By speaking up, you can help others avoid being victims. Complaints can be reported to NCL’s Fraud Center and we will forward them to the appropriate law enforcement agency.

Shop smart online this holiday season – National Consumers League

As Americans return to the workplace next Monday after the long holiday weekend, many will spend a portion of their day surfing the Internet for deals from online retailers. Monday, December 2 — “Cyber Monday” – is what the retail industry claims to be one of, if not the, busiest Internet shopping days of the year, and with more and more consumers opting to avoid the mall, e-shopping next week is expected to be higher than ever. Spending on Cyber Monday is expected to be in the billions of dollars.Whether consumers do their shopping online at the workplace or at home, advocates are reminding them to practice safe e-shopping habits in the coming weeks and year-round. The Internet can make your shopping faster and easier, but there can also be pitfalls if you’re not careful. There are ways to ensure you have a safe online shopping experience, so that gift-giving is a joyous occasion, not an opportunity for cyber thieves.

NCL’s Top Ten Cyber Monday Shopping Tips

  1. Don’t shop online on an unencrypted or open wireless network. As convenient as they seem, an airport or coffee shop’s wireless network is not an appropriate place to conduct financial transactions. Entering personal financial information over an unsecured connection may leave your computer open the to hackers and thieves to capture your financial information. Home Wi-Fi networks can also be compromised, so consumers should find out how to secure their connections.
  2. Secure your computer before shopping online. Before connecting to the Internet or shopping online, take the following three core protections: 1) Install anti-virus and anti-spyware programs and keep them up to date; 2) Install a personal firewall; 3) Regularly update operating system and anti-virus programs to current protections.
  3. Know who you’re dealing with. Before shopping online with an unknown e-store, check out the seller and be sure to get the name and physical address of the vendor in case something goes wrong. If you’re buying gifts on an online auction site, check the track record of the seller before you bid.
  4. Pay the safest way – by credit card, especially when you’re purchasing something that will be delivered later. Under federal law you can dispute the charges if you don’t get what you were promised. You may also dispute unauthorized charges on your credit card. Consider using a “virtual” credit card number.  These numbers replace your plastic credit card number with a new number that is linked to your real account number.  When you’re prompted to enter your credit card number at checkout, you enter the virtual number instead of the real number.  These “virtual” numbers can be set to have a low credit limit, to only work at certain Web sites, or to expire after a certain period of time (two months from date of purchase is a good rule of thumb).  This way, if the Web site you’re shopping at is compromised, the crooks likely won’t be able to run up charges on your real credit account since the virtual number.  A note of caution, however: think twice before using a virtual credit card number for services where you will be billed repeatedly or for things like rental car reservations, since the card may not be billed until you pick up the car.
  5. Only shop on safe sites. When providing payment information, the Web site URL address should change from “http” to “https,” (or, less frequently, “shttp”) indicating that the purchase is encrypted or secured. Look for an icon on the browser (generally in the bottom right of the window), such as an image of a padlock closing, to indicate that the page is secure.
  6. Don’t fall for a phishing email or pop-up. Legitimate companies don’t send unsolicited email messages asking for your password, login name, or your financial information. But scammers do, and it’s called “phishing.” Crooks often send emails that look like they’re from legitimate companies – but direct you to click on a link, where they ask for your personal information. Delete these emails.
  7. Be careful when shopping for a gift in an online auction. Consumers sometimes turn to auctions for harder-to-find collectibles or expensive electronics. Understand how the auction works, and check out the seller’s reputation before you bid. Use safe ways to pay, like a credit card. If you use a 3rd party payment system, read the terms carefully to understand what protection, if any, it offers if you don’t receive what you were promised. Always ask about terms of delivery and return options. Be especially wary of auctions that ask for payment via wire transfer.
  8. Turn your computer off when you’re finished shopping. Many people leave their computers running 24/7, the dream scenario for scammers who want to install malicious software—“malware”—on your machine and then control it remotely to enable them to commit cyber crime. To be extra safe, switch off your computer when you are not using it.
  9. Don’t be tempted by offers of free money. Con artists take advantage of cash-strapped consumers during the holidays to offer personal loans or credit cards for a fee upfront. These scammers simply take the money and run. Beware of emails offering loans or credit, especially if you have credit problems.
  10. Visit www.fraud.org to learn more about protecting yourself from online scams year-round and to report suspicious sites, sellers, or scams. You don’t have to be a victim to report a scam, and your information will help law enforcement go after cyber grinches.

Above all, look into the business or individual with whom you are doing business before making the transaction. For more information on avoiding scams throughout the year, visit www.fraud.org.

Business directory scams preying on small business owners – National Consumers League

The National Consumers League’s Fraud Center is warning businesses and non-profit organizations to be on the guard for con artists armed with bogus “invoices” for business directory listings. We regularly receive complaints about this scam, but so far in 2012, we have received more than 100 complaints, a 500 percent increase (no, that’s not a typo) versus the first nine months of 2011.“Scams tend to come in and out of fashion,” said John Breyault, Director of NCL’s Fraud Center. “It certainly appears that the business directory scam is once again the ‘con du jour’ for fraudsters.”

In a typical business directory scam, the victim (often a small business or non-profit organization) will receive a call asking the recipient to “verify” or “confirm” information such as business address, business name, or fax number for a business directory listing. If the recipient of the call provides this information, the organization shortly receives an urgent “invoice” for the cost of the alleged directory listing. In some cases, a copy of the listing accompanies the invoice, which is often just a printout of an existing online business directory listing.

In many cases, the business receiving the invoice will simply pay the bill without questioning the charge. If the charge is questioned, scammer may threaten legal action or offer a “discount” to get the organization to pay up. In some cases, the scammer may even produce a recording of the original verification phone call as “proof” that the charge was authorized.

Examples of recent scams reported to our Fraud Center:

  • A consumer from Northern California recently contacted us about a directory ad scam she was caught up in. She received a $599.99 bill for an online directory listing for a defunct company she had owned. She was told that they would close the account and zero out the bill. However, she later started receiving collections despite her clear indication that her company that was out of business could not have placed online directory listing ads. Her alleged “bill” is now up above $750 and the harassing faxes have kept coming.
  • Another consumer from Santa Barbara, California described to us a similar online directory scam. After taping an assistant manager’s alleged “authorization,” the consumer’s business received a $599 bill for online directory listings. The assistant manager had in fact received a call, but the scammer claimed it was simply to authorize the removal of an ad. After refusing to pay, the consumer has continued to receive harassing phone calls and faxes threatening to send the account to collections.

Business and non-profit organizations can take action to spot and avoid this scam:

  1. Train staff to spot this scam especially the “verification” phone calls, in staff meetings, on bulletin boards and email alerts. Special attention should be given to employees who answer phones for the organization or who have authority to write checks on behalf of the organization.
  2. Verify existing arrangements for business directory listings before paying invoices for such services. If you’re not sure you’ve ordered such a service, don’t pay the bill.
  3. Don’t be fooled by the “walking fingers” logo or the name “Yellow Pages,” as neither is trademarked or unique to any particular company.
  4. We wary of any invoice that arrives without a phone number or mailing address for the company allegedly billing for the listing service. Even if such information is on the invoice, check up on the business to ensure that it actually exists.
  5. Check with the local Better Business Bureau for the state where the business address is listed. Legitimate businesses should also be registered with their state, typically with the state’s Department of State or Corporation Commission.

Businesses or non-profit organizations that have been approached by this scam or fallen victim to it should be sure to report it to NCL’s Fraud Center at www.fraud.org. For more information on this scam, check out NCL’s fact sheet on bogus invoice scams.

Worrying trends emerging in mobile text messaging and malware – National Consumers League

Several new trends in fraud perpetrated via mobile phones are making it more important than ever for consumers to educate themselves about these next-generation scams.According to security firm Symantec, 31 percent of mobile users have received a text message from someone they didn’t know asking them to click on a fishy link or dial an unknown number. According to security firm Cloudmark, during the first week of September, text messaging (or SMS) phishing attempts increased by 913 percent, making this type of scam the single largest SMS messaging threat. In a typical SMS phishing scam, the consumer receives a text message purportedly from their bank, credit card company or even a health service provider. In each case, the consumer is asked to divulge sensitive personal information that can be used by the scammer to perpetrate fraud or identity theft.

While there’s no foolproof way to avoid these phishing attempts, consumers can take some steps to mitigate the risk:

  • First, don’t share your cell phone number widely, particularly on Web sites that ask for your number as part of a survey or sweepstakes.
  • Second, never click on suspicious links in text messages, particularly if they come from unknown or unfamiliar senders.
  • Third, many wireless carriers offer spam controls that can reduce unwanted text messages. Consumers should contact their carrier to get details. In extreme cases, you could even turn off the ability to receive all text messages.

Consumers can also help report suspicious text messages by forwarding them to 7726.

Malware threats

Smartphone users should also be aware of the increasing prevalence of malicious software, called “malware” for short. Mobile security firm Lookout predicts that four in ten American mobile users will click on an unsafe link this year. This unsafe clicking can lead to so-called “toll fraud” where consumers are billed for premium SMS services, often without their knowledge. According to Lookout, in the first quarter of 2012, toll fraud malware surpassed spyware as the most prevalent form of mobile malware. It is estimated that more than six million people were affected by mobile malware on Android phones from June 2011-June 2012 alone.

Consumers can take steps to protect themselves from mobile malware:

  • First, don’t click on suspicious Web links from your phone’s browser.
  • Second, be wary when downloading apps from independent app stores or unfamiliar sites.
  • Third, pay close attention to your monthly wireless bill and dispute any suspicious charge.
  • Finally, consider installing a mobile security app, which will scan new apps and can protect you from unsafe sites.

Consumers who have been a victim of SMS or mobile malware fraud should report these scams to NCL at Fraud.org.

Payday lending scams kicking consumers when they’re down – National Consumers League

Payday loans are notoriously bad deals for consumers, providing short-term fixes to financial dilemmas at an extremely high cost. Con artists are finding ways of making them even worse.These days, fraudsters targeting consumers who are down on their luck and desperate for money are providing another reason for consumers to avoid the temptation of a payday loan. The growing popularity of online loans has attracted scam artists who are eager to prey on these vulnerable consumers.

In a typical payday loan scam, the victim, who may or may not have ever actually applied for or taken out a loan, receives a call or email demanding that they pay back an overdue debt. Because of porous information-sharing practices, consumer’s personal information often finds its way into the hands of fraudsters, making it easy for them to recite the consumer’s personal and confidential information.

The scam artist may threaten the consumer with immediate arrest if he or she does not pay right away. This is a clear giveaway that it’s a scam, but it also causes people to act irrationally out of fear. Scammers have been known to make dozens of such threatening phone calls to victims’ homes or places of work in order to extract funds. Victims are often accused of perpetrating check fraud, forgery or money laundering to scare them into paying up immediately, when in fact no money is owed.

Consumers shopping for an online payday loan should be aware that even legitimate-looking Web sites could in fact be fronts for scammers. Some “red flags” of a possible scam loan Web site include:

  • Requests to pay upfront before receiving a loan
  • Payment is requested via wire transfer
  • Payday loan Web sites that lack working phone numbers or mailing addresses
  • The payday lending company is based overseas
  • Loan packages that sounds “too good to be true”

Even legitimate payday loans, whether acquired online or in person, are already notorious for outrageously high interest rates. There costs are often hidden in fine print or outright lied about. The Federal Trade Commission recently sued several payday loan companies for “lying about interest rates, requiring borrowers to let the company take money out of their bank account automatically and threatened to sue borrowers or have them arrested for non-payment.”

Payday loans should be a last resort for cash-strapped consumers. They may solve financial issues in the short term, but paying it back will put you further into debt. For example, a recent survey of online payday lenders by the Consumer Federation of America found that the typical cost of a two-week $500 loan is $125, or a whopping 652 percent APR.

Bogus charities expected to prey on donations for wildfire aid – National Consumers League

Recent wildfires in Colorado have destroyed hundreds of homes and have forced tens of thousands of residents to evacuate. In June, President Obama declared the situation a national disaster, and the Forest Service warned it could take weeks to get the blaze under control. After disasters such as this, many Americans try to help out those who have been affected by donating by charities that promise to assist the victims.NCL is warning consumers to be careful about what charity they choose, or risk becoming the victim of a charity scam.

Scam artists are opportunistic, and charity scams are a perfect illustration of this. Following high-profile disasters such as the 2004 Indian Ocean tsunami, the 2007 Virginia Tech shootings and the 2010 Haiti earthquake, there were numerous reports of consumers receiving solicitations from fraudulent charities. Regardless of the specifics of the disaster, the scammers use the visibility of these disasters in the news media to generate sympathy and cash from their victims.

Consumers should watch out for the following “red flags” for charity scams:

  • The charity refuses to provide any documentation of their 501(c)3 non-profit status or other identifying information such as a mailing address, annual report or website
  • You are pressured to commit to a donation immediately or are asked to provide sensitive personal information
  • Requests for donations to be made in cash or via wire transfer
  • Guarantees of sweepstakes winnings or other prizes if you donate
  • Charities with unfamiliar names that you’ve never heard of

Before giving to a charity, be sure to check their reputation on sites like Charity Navigator and GiveWell.org, which rank charities based on efficiency, transparency and accountability. Be cautious if a charity contacts you first or pressures you to give money or information immediately. Legitimate charities give donors as much time as they need. Remember, the cause will be just as worthy tomorrow as it is today. Also, be sure to ask whether the person calling you represents the charity itself or a professional fundraising company. If the caller represents a professional fundraising company, be sure to ask how much of each donation they collect for “administrative costs” or “overhead.” It is not uncommon for such companies to take 80% or more of every donation for these fees.

After donating, you should still be thoughtful and careful about interacting with the charity. Many organizations continue to contact donors after a donation and may sell or rent your contact information to other organizations. If you are frequently contacted by organizations you do not wish to donate to, ask them to put your name on a “Do Not Call” list.

Keep track of your contribution(s) so you can put them down as tax deductions. If you give a large contribution or frequent contributions, feel comfortable asking for the organization’s annual report and financial statements. This will give you an idea of what the organization is currently doing with your and other people’s money.

Millions of people, both in the United States and worldwide, are suffering and charities do amazing work in benefiting the world. Unfortunately, scam artists masquerading as charities are only out for their own gain. They will take advantage whoever they come across in order to benefit themselves. Do not fall for their traps.

You on Twitter? So are scammers – National Consumers League

Many consumers find the popular social media site, Twitter, useful for staying in touch with friends and family and getting updates from organizations or famous people. Unfortunately, scammers see the millions of Twitter users very differently: as potential targets.Scams on Twitter usually involve some kind of link or promise from either a user you don’t know or a user whose account has been compromised.

A common scheme is for a scammer to create an account then follow or direct message hundreds or thousands of other users. Each time a user is followed, they receive an alert with a link to the scammer’s profile. The profile often contains links to malware or phishing sites. A recently popular method of this is a direct message or tweet with a message like “lol is this really you?” with a link attached.

Yet another scheme scammers use is to post something that leads to a link that looks like a Twitter login page, but isn’t, and thus when a user types in his username and password, the fraudster has access to their account and can use it to target others.

Other signs of a fraudulent account are: repeatedly posting duplicate updates, abusing basic functions of Twitter to get attention, and posting links with unrelated tweets.

How can Twitter users avoid falling for a scam?

Twitter users should ignore any direct messages or tweets that promise that by simply clicking on a link they will receive thousands of followers. Any “get followers quick” method promised by someone else is a way to steal money or private information.

Twitter is aware of scammers using its site, and shuts down the accounts of spammers users report, so users shouldn’t hesitate to report a suspicious Twitter handle that displays any of the red flags. Other tips for using Twitter and avoiding the pitfalls of a scam are:

  • Use a strong password
  • Always make sure you’re on Twitter.com before giving login information
  • Use HTTPs for security
  • Beware of direct messages from people you don’t know, especially if they promise to help you “immediately” get thousands of followers
  • Be suspicious is you are followed by someone posing as a celebrity. Well-known Twitter users often have Verified Accounts (signified by a check mark next to their profile name)
  • If you don’t know someone following you, don’t click on links in their profile.
  • If you encounter abusive and/or annoying behavior on Twitter, block and ignore the profile responsible and report it to Twitter.

There are many organizations with Twitter accounts that work to protect people from online fraud and other consumer issues such as the Better Business Bureau (@BBB_US) and the Federal Trade Commission (@FTCgov), Visa Security Sense (@visasecurity), StopBadware.org (@StopBadware), StopThinkConnect.org (@StopThinkConnect) and the National Cyber Security Alliance (@StaySafeOnline).

Twitter’s Help Center (@Support) also provides useful information on identifying spammers and protecting your account.

Stay safe and have fun in the Twittersphere!

Watch out for scholarship scams – National Consumers League

92_graduates.jpgGraduation season means optimism about a bright future ahead. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money: scholarship scams. As millions of college graduates don their caps and gowns this spring, advocates are warning them of the signs of too-good-to-be-true aid offers.Congratulations, graduates! Prospective college students often look to scholarships as a way to lessen the financial burden on parents and to avoid taking out student loans. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money – scholarship scams.

Scholarship scams prey on consumers’ eagerness to find ways to pay for higher education. They come in a variety of guises, but a common thread is that usually there is need for the victim to pay money or provide a credit or debit card number up front before a supposed scholarship or grant is awarded. A good rule of thumb is that if you have to pay money to get money, it’s probably a scam.

Other red flags when it comes to scholarship scams are offers that promise “guaranteed” scholarships or pressure to act quickly in order to secure money. Consumers should also be wary of services that offer to match grant seekers with scholarships (sometimes known as financial aid advice services), especially if they offer to apply for you or require a big fee. Some scholarship scams ask you to pay money for information you can get for free, such as the federal FAFSA form. There are any number of free sources of financial aid information, including school counselors, state education agencies, the U.S. Department of Education and the Federal Student Aid Information Center. Be careful, too, when you receive unsolicited offers to help with financial aid from people or organizations you’ve never heard of or can’t find reliable information about.

Resources

For more information about scholarship scams and other resources you can use, visit StudentAid.Ed.gov, the U.S. Department of Education’s site for free information on preparing for and funding education beyond high school. You can complete the FAFSA here, and learn about other FAFSA filing options here. You also can call 1-800-4-FED-AID.

If you think you’ve been scammed, file a report via:

Top 10 red flags of home repair scams – National Consumers League

Have you made your first spring trip to your local hardware store yet? With the arrival of spring, many consumers are already busy with projects around the house. Unfortunately, warm weather ushers in both blooming flowers and scammers offering all manner of shoddy home repair “services” and outright scams.This spring, don’t be a victim of home repair scams. Arm yourself by being aware of the following red flags of potential home repair scams:

  1. Contractors who appear uninvited at your doorstep or who call or email you out of the blue.
  2. The contractor says they are doing work in your neighborhood and claims they have “extra material” left over
  3. You feel pressured to make a decision and sign a contract for the work immediately
  4. The contractor offers a “special deal” available “today only”
  5. The contractor points out a “problem” with your home that you never noticed yourself before. Some unscrupulous scam artists have been known to offer “free” inspections and then break something on purpose so they can be paid to “fix” the problem
  6. The contractor demands full payment up front, particularly if payment is demanded in cash.
  7. The contractor lacks identification, such as a permit from the city or locality
  8. Offers to give you a discount so that your home can be used as a “model” or if you find additional customers for him/her
  9. The contractor offers to help finance the project, either from his own funds or the funds of an associate, especially if your home equity or home deed is involved.
  10. The contractor insists you come and examine “damage” with him (while an associate steals valuables from your home)

Some of the more common types of home repair scam involve duct cleaning, driveway sealant, leaky foundations, landscaping, furnace and roofing repair. This is by no means an exhaustive list, however.

Consumers can take some precautions to avoid home repair scams, including:

  • Get multiple estimates on any home repair job before signing a contract
  • Check out the contractor’s references and visit the site to check out the quality of the work itself, if possible
  • Check for complaints with the Better Business Bureau and make sure the contractor is registered with your state board of contractors and your local building inspection office
  • Never pay in full up front, especially if cash is the only payment accepted
  • Make sure the contractor is insured and bonded
  • Document in writing the scope of the work to be done and the complete cost and time necessary to complete the job and how payment will be handled.

Prizes/Sweepstakes bump fake checks as top scam – National Consumers League

The data is in! NCL’s Fraud Center has released the Top 10 scams of 2011, and bogus prizes and sweepstakes have bumped fake check scams to take the #1 spot. Also on the rise, and a concern for advocates, is that scammers posing as loved ones and preying on victims’ emotions, like the Grandfather Scam we’ve reported on in recent months, are on the rise.Another significant finding is that scammers appear to have targeted their scams at particular age groups more than ever in 2011. For example, complaints involving bogus prizes, sweepstakes, and free gifts made up 26.98 percent of complaints overall. However, among consumers ages 56-65 and above 65, these types of complaints made up 40.96 percent and 60.12 percent of the total, respectively. Similarly, fake check scams made up 26.65 percent of complaints overall. Among consumers age 18-25, fake check scam complaints made up 45.74 percent of the total.

Top 10 scams of 2011:

  1. Prizes, sweepstakes and fake free gifts
  2. Fake check scams
  3. Internet scams for general merchandise
  4. Phishing and spoofing
  5. Advance fee loans and “credit arrangers”
  6. Scholarships and grants
  7. Friendship and sweetheart swindles
  8. Nigerian money offers (not prizes)
  9. Family or friend imposters
  10. Fraudulent Internet auctions

New to the Top Ten Scams list this year is the Family/Friend Imposter Scam, the 9th-most frequently reporter type of fraud. In response to a rash of complaints, NCL’s Fraud Center began tracking this fraud (also known as the “Grandparent Scam”) in 2011. In these scams, a con artist typically poses as a relative in distress or someone claiming to represent the relative (such as a lawyer or law enforcement agent). The scammer frantically describes an emergency situation in which they have found themselves (such as being arrested, in an auto accident, in need of a lawyer, etc.) and asks the victim to send money for bail, lawyer’s fees, hospital bills, or other expenses. The victim is urged not to tell anyone, such as the parent of the “grandchild” because they do not want them to find out about the trouble they’ve gotten themselves into.

“Scam artists will stop at nothing to defraud consumers,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “The scary part about these scams is that they prey on our natural inclination to want to help a loved one who is in distress.”

According to the consumer group, the majority of money lost was sent via wire transfer, a popular payment method among scammers because of the difficulty to track – and particularly devastating to consumers because of the improbability of recovering lost funds. Consumers should be wary of any offer that requires wiring of money, said NCL.

The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, examined trends in Internet and telemarketing fraud in 2011.

“Fraudulent telemarketers and Web-based scammers are hardened criminals out to take their victims’ life savings,” said NCL Executive Director Sally Greenberg. “The best way for consumers to fight back is to get educated and not be afraid to report such fraud to law enforcement. Scammers know all too well that their victims are often embarrassed and count on this to continue to perpetrate their crimes.”

For more information on NCL’s 2011 Top Ten Scams report, click here. Consumers who wish to report a fraud or potential fraud can do so via the online complaint form at NCL’s Fraud.org Web site.