Misinformation and Good Intentions Drive Green Scams and Energy Fraud

Green scams: Whether it’s bogus investments, energy fraud and supposed savings or other cons, when it comes to being green it’s easy to draw the wrong conclusions: Internet ScamBusters #303

Sometimes it’s a downright fraud, other times you’re offered a legitimate product or service that’s supposed to be good for the environment or your wallet, but is it?

This week we put green scams, energy fraud and conservation under the microscope and underline the importance of doing research before making decisions on everything from investing to recycling.

Before we begin, we recommend you check out this week’s issue of Scamlines — What’s New in Scams?

Next, you may want to spend a moment looking at this week’s most popular articles from our other sites:

Answers to 7 of the Biggest Questions About Photographing Fall Colors: An Interview With Jim Zuckerman: Jim shares his tips for photographing fall colors and what plays the biggest part in how much success you have.

Setting a Credit Card Example for Your Kids: Find out how your actions influence how your children approach credit card use in the future.

How To Find The Best Photo Sharing Website For You: Before you even start looking for a photo sharing website decide what you want to do with your photos online.

How To Keep Your Energy Costs As Low As Possible: Reduce your energy costs without heading to the hills and living without power or indoor plumbing with these tips.

Now, here we go…


Misinformation and Good Intentions Drive Green Scams and Energy Fraud


In these days of concern about the environment and the amount of money in your wallet, it’s easy to be duped by green scams and phony promises about cutting fuel costs.

Scammers know how to tap into public sentiment. They understand that many of us care about green issues and energy consumption, so they’ve hatched a whole nest-full of tricks aimed at catching us out.

What’s more, even services and equipment that are perfectly legal and seem to make sound environmental sense are not always what they appear to be, with paybacks or savings that simply don’t cover their cost.

This week we spotlight areas of environment or energy conservation that are either green scams or, at best, are misleading in the way they’re presented to us.

We want to emphasize that, here at Scambusters, our outlook is definitely in favor of protecting the environment. Yet, we are certainly not venturing into the politics of this. We just don’t think you should be green about being green! :)

1. Investment schemes promise quick riches

Just as you can get bogus or questionable investment deals in any other area of business, so you’ll discover what seem to be mouthwatering opportunities to put your money into stocks or schemes with a green hue.

Mostly, these are supposed get-rich-quick investments where someone claims to have an energy-saving device or a formula for cheap or pollution free fuel.

In a typical case that has recently arrived from Africa, people get an email apparently from a government official, inviting them to buy a patent and take a share in the profits for a newly-invented “Renewable Energy Technology System,” which, of course, doesn’t exist.

And this past August, the Securities and Exchange Commission halted an allegedly fraudulent scheme that raised over $7.2m from investors who were told the money would be used in a business that shredded and recycled used tires. However, said the SEC, the tire shredding equipment did not work, there was no reasonable basis for purported income and return figures, and the investors never received a dime from their investment.

Even where schemes really exist, it pays to be skeptical about claims their promoters make about products and promised returns, as investors who plowed millions of dollars into a collapsed South African scheme to make biofuels from algae have just discovered to their cost.

In other cases, investors are bombarded by so-called “boiler room” high-pressure sales calls or faxes and emails with “inside information” on a company that’s about to disclose some kind of energy or environmental breakthrough.

In reality, they’re just trying to hype the stock price of a company that usually hasn’t much to offer — so they can sell their stakes at a big profit.

You’ll find plenty of guidance here on the Scambusters site about how to avoid investment scams. The bottom line is: Don’t invest without doing full research and getting appropriate professional financial advice.

2. Miracle devices, fuel-savers and consumer awareness

From cars that run on water, to plug-in devices that slash your electricity consumption, there’s certainly no shortage of green scams that claim to save you money and help the environment.

In fact, experts say there is no scientific evidence that any of these offer any significant cost savings — if they work at all — especially in the short term or when used by individual consumers.

In the past few years, the Federal Trade Commission has sent out scores of warnings to companies making untruthful or unprovable claims for their energy-related products.

Even perfectly legal and real functional products and services that do create energy savings need to be carefully considered.

For example, experts recommend you calculate how long it will take to pay back the extra money you invest in green products that do save energy and money before you decide whether they make sense for you. It may be worth it to you just to be green even if the payback isn’t there, but you should make an informed decision.

3. Where ecotourism does more harm than good

The idea is sound: make people pay to visit environmentally sensitive areas and you can boost the local economy, provide jobs and equipment, and conserve the places you are promoting.

But all is not always what it seems. Traveling through some of these areas is, in itself, destructive. The unique flora and fauna of the Galapagos Islands for example are now considered at risk because of over-visiting by tourists. Will the travel agency tell you that?

Even worse, game reserves, wildlife refuges and other animal spectacles which appeal to environmental enthusiasts have been known to drug or mistreat animals for the benefit of creating the right “shop-front” impression to tourists.

That’s not to say you shouldn’t visit these places — just that you should do so with your eyes open and research to make sure that what you’re doing doesn’t cause more harm than good.

“Companies that are calling themselves ecotourism but hurt the environment or communities . . . our response is that that’s not ecotourism,” says Ayako Ezaki, communications director of The International Ecotourism Society. So, be careful.

4. What happens to your recycled electronics?

One of the biggest headaches our hi-tech society has created is the problem of getting rid of our computers and other electronic equipment, some elements of which are dangerous if they leach into natural and public water systems.

Authorities rightly encourage us to recycle them though often we have to pay specialist companies to dispose of them. This is usually a fair price to pay for being responsibly green — as long as you know what the recycler does with your stuff after you’ve dropped it off.

Scandals have surfaced recently where supposed recyclers just removed valuable parts and abandoned the rest, leaving it to leach into the air and the ground.

In other cases, used equipment has been shipped to third world countries where it is merely dumped and left as a permanent hazard — or even picked over by poor people unaware of the dangers.

Cities and environmental licensing bodies have now clamped down on these practices. But before you use local recycling services, satisfy yourself about the way they operate and are controlled.

In addition, some computer manufacturers now have their own recycling programs. Consider looking into these as well.

5. Know Your Stuff

So much of being green and energy-conscious is down to common sense and if you apply that you can sidestep the scammers.

For example, lowering your thermostat, driving more slowly and recycling are probably the most cost-effective energy conservation measures you can take — and they don’t cost you a dime. You can read more about energy-conscious driving and gas prices on our site, as well as about saving on home heating.

So, when people come to your door, trying to sell great money-saving, energy-saving, green devices, ask yourself why they need to do this if the devices are so good. Don’t allow them in — they sometimes are trying to scope out your home for theft.

Further, many of these devices may actually harm your gas tank, etc. Be very careful.

Above all, be aware that environmental and energy conservation are important subjects that you can learn about and understand. In fact, some people spend their lives devoted to studying these areas. And you can benefit from that by exploring their findings on the Internet.

Finally, don’t be bamboozled into spending your time and money on dubious investments, miracle devices, ecotourism or other big ideas until you’ve done your research.

That’s it for today — we hope you enjoy your week!