By Peter White
NASHVILLE, TN — The Federal Trade Commission (FTC) has been getting a lot of complaints lately about get-rich-quick schemes that are just scams. Fraudsters offer bogus investment opportunities, or stay-at-home jobs, or business training. Typically, scammers will say that you can make a lot of money fast but first you have to part with some of your own. Don’t believe such offers.
“With record unemployment and ongoing financial impact of the pandemic, more and more people are looking for ways to make
ends meet. And scammers, unfortunately, are taking advantage of that with false promises of money and security that people need so much,” said Kati Daffan, assistant director of FTC’s marketing practices division.
Daffan said the FTC wants to send a message that people in every community need to be on the alert for income scams. “We’re seeing a lot of different kinds of pyramid and chain letter schemes flourishing on social media right now. We’ve seen a big increase in that since the pandemic,” Daffan said.
She said scammers often target particular communities. Fake Sou-Sous have targeted immigrants from West Africa and the Caribbean. A Sou-Sou is a rotating savings club between a small group of trusted people, usually family and friends, who are taking turns being paid out from the savings fund they all pay into. It’s a traditional and effective way to raise capital for a small business or a home remodel.
But fake sou-sous are all about recruiting more people into the same circle so you can get a big payday. “Sou-sou, circle game, blessing loom, money board, whatever they are called, they promise you will make more money than you put in and they depend on recruiting new people. Like other pyramid schemes you are not able to make money and the majority lose everything they put in,” Daffan said.
Daffan had some advice for people who may have seen or received a business offer.
“Take your time. Scammers really want people to act fast,” she said. Talk to someone you trust. When you do, you might realize that if something seems too good to be true, it probably is. So think about how they want you to pay.
“Never deposit a check and send that money back to someone or send money back using a gift card. That’s a scam. Period,” she said. Another piece of advice: research the company before you spend any money.
FTC has recently posted three articles about job scams, business offers or coaching scams, and real estate/investment scams on
their website: ftc.gov. There is useful consumer information about scams here: https://www.consumer.ftc.gov/features/scam-alerts
The FTC received a record-breaking number of income scam complaints in the 2nd quarter of 2020. Consumers reported losing $150 million on income scams in the first 9 months of 2020 and those losses are just a fraction of the unreported fraud that is actually going on.
Last week, a joint crackdown by 19 agencies, including the FTC, U.S. Securities and Exchange Commission, the U.S Commodity Futures Trading Commission (CFTC), the U.S. Attorney’s Office for the Eastern District of Arkansas, and ten state agencies
interrupted 50 income scam operations in a nationwide effort called “Operation Income Illusion”. FTC estimates that 15 scams reported to them at www.ReportFraud.ftc.gov bilked consumers out of more than $1 billion.
“We are able to get money back to people,” said Rhonda Perkins, an FTC attorney who prosecutes fraud cases. She said usually it’s just a fraction of what people have lost. Perkins said what’s better than helping people get some money back is helping them avoid losing it in the first place.
“If you are thinking of making a big investment or something doesn’t feel right talk to your friends, your family, people you trust in your community,” she said.
Some of the schemes targeted in Operation Income Illusion impacted one or more specific groups: students, military families, people on a limited fixed income, immigrants, Black Americans, Latinos, the deaf and hearing loss communities, or older adults. A new FTC analysis explores what groups of consumers were most likely to be affected in certain FTC income scam actions.
Purushottam Dhakal, editor in chief of Nepal24hours.com, reported that South Asian immigrant communities have been terrorized by constant calls from fake Social Security and IRS officials. The caller threatens them with deportation if they don’t cooperate. Dhakal said even after the telephone number was reported to police, the calls didn’t stop. It is 323-790-2066.
A similar Social Security scam has occurred in Tennessee with seniors getting calls from someone who says there is a big problem with your account and you owe them money. None of that is true. The IRS and Social Security contact people in writing and never ask for private information over the phone. If you get such a call, simply hang up and report the number to the FTC.
FTC expects scammers will exploit the rollout of coronavirus vaccines. Information is available here: https://www.consumer.ftc.gov/blog/2020/12/covid-19-vaccines-are-pipeline-scammers-wont-be-far-behind
