Karen Reeves, President and CEO of the Better Business Bureau (BBB) of North Alabama, spoke to The Huntsville Rotary Club on November 19 about five common scams that impact consumers and how to avoid becoming a victim of one.

“It began with a group of businessmen that came together years ago — back in the snake oil days, when people were making all kinds of crazy claims — and they said ‘Hey, we’re going to advertise truthfully and honestly,’” said Reeves of BBB’s founding over 100 years ago.

One of the primary functions of the BBB today is to serve as a liaison between consumers and businesses. If a client has an unfavorable dealing with a business, they can reach out to the BBB. Representatives from the BBB will then work with the consumer and the company to come to a resolution that is agreeable to all parties.

Another purpose of the BBB is to provide scam prevention and fraud education for the community.

Each spring, the BBB releases a Scam Tracker Risk Report; the report provides quantitative and qualitative data on the most widespread scams that took place in the United States during the following calendar year.

The following scams were the most prevalent in 2023:

Investment and Cryptocurrency

The old adage “If it seems too good to be true, it probably is” could be applied to each of the scams and fraudulent investment schemes are no different.

Reeves said that phony “investors” will contact consumers and promise stratospheric rates of return for small investments.

Uneven regulation makes the trade of cryptocurrency particularly vulnerable to scams.

“If you send cash for cryptocurrency there is no way to get that money back,” said Reeves. “The average loss for investment scams last year was $3,800.”

Employment

Scammers may post fake jobs in order to solicit personal information from job seekers.

Another employment scam involves scammers telling would-be “employees” that they must purchase expensive equipment before they can begin working.

In this particular racket, scammers send their victims a counterfeit check. After the victim deposits the check — but before the check clears — scammers ask the victims to wire back an “overage” amount.

Reeves spoke with a local woman who encountered this scam. The woman was sent a $19,000 check, which she deposited in her bank account. She was then asked to purchase expensive cameras and wire back the “leftover” funds.

When it became clear that the original $19,000 check was counterfeit, the young woman had to personally make restitution at her bank for the lost funds.

Online Purchase

In online purchase scams, consumers may pay for goods online that never arrive or that arrive but are not as advertised.

Reeves said that one of her coworkers at the BBB recently fell victim to an online shopping scam.

The woman saw a pair of red high heels for sale on a site for an incredibly low price. She ordered a women’s size 9.5 shoe.

“When she got those beautiful red pumps they were so small they wouldn’t fit a toddler,” said Reeves.

Reeves said that consumers should always look in the browser to see that it says “https.”

That “s” means secure.

Consumers should also consider using a credit card, rather than a debit card, when shopping online. Reeves pointed out that it is possible to dispute charges that have been made on a credit card.

Home Improvement

Unfortunately, scammers take advantage of the many storms that we have in North Alabama to target homeowners who need help in the aftermath of storm damage, said Reeves.

Scammers may come to your door after your home or property has sustained damage and offer their services. They may do shoddy work and then disappear after they have been paid but before they have completed the job.

Consumers can always look up service providers on bbb.org. Local companies that have been in business for a longer period of time are typically the safest option.

“We encourage folks to never pay up front and to get everything in writing,” said Reeves.

If a company does request payment up front, that amount should not exceed 50% of the total cost, she said.

Romance

Romance scams are on the rise, said Reeves.

They typically begin on dating sites where scammers work quickly to build trust and to move the conversation off of the original site.

Romance scammers may ask for money for a plane ticket to “visit” their target, or they may say that a family member is sick and needs help in an emergency.

“Last month we had the opportunity to hold a community fraud event here at First Baptist and we had a sweet little lady who was a local victim here in town and she had lost over $450,000 — to the point that she had mortgaged her home,” said Reeves.

In North Alabama, the average amount of money lost in a romance scam was $40,000.

Romance scams are the number one scam faced by people in the 55 – 64 age bracket. Both men and women can fall victim to romance scams, said Reeves.

Tips to Avoid Scams

Common sense tips for avoiding scams include:

Never send money to someone who you have not met in person.
Don’t click on links in unsolicited emails or text messages.
Avoid making purchases on social media sites.
Don’t be pressured into making decisions immediately.
Wait to return home before posting travel pictures to social media.
Avoid offers that seem too good to be true.

Reeves encouraged Rotarians to use the BBB’s Scam Tracker if they need to report a scam or if they are concerned that they are being targeted by a scam.