Consumers face new prize draw scam
Monday, 27 Oct 2008 09:01
New scams involve money mules, of course
A new twist on prize draw scams has emerged which consumers need to be wary of, the Office of Fair Trading (OFT) warned today.
Such scams usually involve victims receiving a phone call and being informed they can claim a prize, if they are willing to pay 'refundable' taxes and insurance fees, but no prize is every forthcoming.
However, an investigation by City of Westminster Trading Standards Service and the police has discovered a new twist – with victims groomed by scammers into unknowingly acting as 'money mules' to launder other victims' money.
The new scam sees victims informed their prize had arrived at a UK airport but are informed further sums of money are required for its release. Victims are then told to send personal cheques, often for thousands of pounds, to UK 'agents'.
These 'agents', however, are other victims of the same scam who had been duped into acting as 'money mules', banking the cheques and innocently transferring the money to the scammer overseas.
Victims receiving the cheques, who often had exhausted their own life savings, were told the scammers the money was from 'sponsors' to help pay the required release fee for their prize.
None of the victims received any financial advantage for being 'money mules'.
"Prize draw scammers are becoming ever more sophisticated and devious in their attempts to con victims out of their life savings," explained Mike Haley, OFT director of consumer protection.
"It is despicable that the scammers are exploiting innocent victims to launder money and help defraud other vulnerable people."
At least 22 elderly victims of the fraud have been identified to date, a number of whom were sending cheques to each other as well as to the scammer and who have collectively lost at least £350,000.
Sue Jones, head of trading standards at Westminster Council, said: "This is the first time we've seen people used as money mules through scams in the UK but they are much more common in America and Canada. Unfortunately, it looks like we may see more of these as fraudsters invent ever more sophisticated scams."