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
: 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

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

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

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

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!