Scamlines 21: Utility scams and investment fraud play on fear and ignorance

Power cut threats and switches, phony investment schemes among 9 latest con tricks

Spates of utility company scams and investment cons dominate this week’s roundup of the scam headlines.

Sometimes the scammers play on victims’ fears; other times they target their ignorance. Sometimes they’re after money; other times they want personal financial details they can use elsewhere.

We also have a sad story of how a couple, desperate to be Mom and Dad, were tricked into paying for a phantom pregnancy, and the tale of a bogus wastepaper collector whose favorite charity was his back pocket.

1. Utility scam #1: Power cut threat forces card payments

The scam: In various parts of Iowa, residents receive calls supposedly from local power companies, warning that bills have not been paid and that supplies will be disconnected.

In some cases, the caller ID service spoofs the real name and phone number of the company, convincing residents it’s genuine. They give credit or debit card details for an instant payment, which are used elsewhere for fraudulent purchases.

Similar calls also go to businesses in the Roseville area of California, only this time the payments are actually cashed out by a bogus company out of Chicago, rather than the cards being used for other purchases.

The solution: Power companies do not operate in this way. Disconnection warnings are a last resort after repeated warnings, and are sent by mail. If in doubt, get the power company number independently and phone them to check.

2. Utility scam #2: Water bill refunder asks for change

The scam: A sneaky trick — a conman calls at the home of an elderly person in Janesville, WI, saying he’s from the water company and that she overpaid her bill. He tells her she’s due a refund of $40 and asks her to make change from a $100 bill.

It’s not clear whether the $100 was a dud or if he just planned either to snatch her money or see where she kept her cash. But happily, because she couldn’t make the change, he left empty handed.

The solution: Utility firms don’t make cash refunds at your front door. Don’t listen to anyone who makes this kind of offer. Politely get rid of them and shut the door.

3. Utility scam # 3: Skip this power switch

The scam: Upstate New York residents fall for a convincing tale that promises lower utility charges if they switch to a different provider. A short time after they make the switches, the new firm hikes its rates.

Other victims allege their supply was switched without consent and that the new company demands thousands of dollars to cancel the contract.

The solution: New state legislation could be on the way to curtail these scammers. Meantime, if anyone offers you a big cut in utility charges, take it with a pinch of salt and skip the switch.

4. Scammer fakes adoption pregnancy

The scam: In Naples, FL, a couple, working through an adoption agency, learn they have a potential match — a young mother who’s prepared to give up her child for adoption. They agree to pay her living expenses but later discover she’s not pregnant.

She fools the agency by presenting a urine specimen from someone who is pregnant, but both the agency and the prospective parents find she isn’t seeing her doctor for check-ups. Later, she claims to have miscarried but this also is untrue.

The solution: The couple lost $4,000 but that wasn’t even the biggest issue. It’s the distress the drama caused them. The onus is on the agency to make more thorough checks before raising clients’ hopes.

5. “Yes, we can sell your $100 car for $6,000”

The scam: People advertising their cars for sale in the UK, both online or in traditional media, are contacted by another online service saying they already have buyers lined up if the seller will agree to list with them for £99 (about $190)

The listing service is legit but whether they have buyers is challenged. A British newspaper tested them by buying a trashed car for about $100 and offering it for sale for around $6,000. Sure enough the online service said they could sell it.

Another skeptic invited them to sell an non-existent auto with a made-up name. Again, they said they could.

The solution: This is one of those cases where a scammer operates just on the edge of the law — a legitimate service making questionable claims. In fact, their website is full of supposed testimonials from satisfied clients.

In reality, if you can’t sell your vehicle through reputable publications and online services, why think that someone you’ve never heard of can sell it for you?

6. Investment scam #1: Conman fakes property ownership

The scam: In Okanagan, BC, a scammer offers to buy several multi-million-dollar properties in the Canadian province. As the deals proceed but before any money changes hands, he solicits investments from others, claiming he owns the properties.

Fortunately, an astute Realtor spots the trick and halts the deals. It’s not known if the scammer managed to pull in any investors.

The solution: An easy check on the land title deeds would show he didn’t own the properties. Professional advice should always be sought for this type of investment.

We wrote about how to avoid investing scams here and more about financial literacy here.

7. Investment scam #2: Research scheme was pure invention

The scam: In Elk River, MN a scammer offers shares in a new research facility he says he plans to set up. He nets $35,000 before someone exposes the trick. No such facility is planned and police said the scammer just invented the project.

The solution: Con artists succeed because they are both plausible and persuasive, so these are the first signs to watch out for when someone presents you with a tempting scheme.

Never invest without thoroughly checking out both the individual and the supposed project.

8. Investment scam #3: Share advisers disappear

The scam: Scammers use a public list of shareholders in a British bank to contact them and offer advice and support with a forthcoming rights issue (a special issue of additional shares to existing shareholders).

The shareholders pay a fee for the service and that’s the last they see of it or hear of the company.

The solution: People who need advice on a share issue and are prepared to pay for it should go to a stockbroker or other financial adviser.

9. Waste paper scammer scores a double hit

The scam: A Chandler, AZ, man sets up waste paper collection dumpsters with posters claiming the proceeds go to various charities. They don’t. They end up in his pocket.

Then he works a second con by tricking a weight-recording system at the depot where he sells the paper, effectively getting cash for more paper than he actually delivers.

The solution: Ever put old newspapers in one of those dumpsters? We have. Next time, we’ll check them out first. Think we’ll leave the paper buyers to check things out for themselves at their end!

For more on charity fraud and charity scams read these Scambusters articles.

Some of this week’s stories, like the one above and the adoption report, show scammers at work where you least expect them. Sadly, you start to wonder who you can trust, Well, the good news is that you can trust Scambusters and Scamlines to keep you informed!