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There are a lot of people out there who would like to take your money and run. Unfortunately, fraud is rampant in our marketplace, says E. Thomas Garman, a professor of consumer affairs at Virginia Polytechnic Institute and State University. He is amazed, he says, by how many people are willing to lie, cheat and steal to take advantage of others.

For example, "the National Consumers League estimates that 50 percent of all telemarketing calls involve fraud."And, he says, the people who perpetrate these frauds are professionals - smooth, persuasive. "They spend their lives honing and enhancing what they say. We consumers are the amateurs."

But, while we hear a lot about fraud, there is another problem in the marketplace that creates a lot of problems for consumers: rip-offs. And while we have laws and regulations that offer some protection against frauds, consumers are on their own with rip-offs. Because, says Garman, rip-offs may be unfair, exploitive, unethical and sometimes unconscionable, but they are generally not illegal. In his book "Ripoffs and Frauds: How to Avoid and How to Get Away," Garman defines a rip-off as an "unfair act of exploitation in the marketplace. Most often rip-offs involve paying prices that are too high or having little recourse when caught in an unfavorable situation."

Frauds and rip-offs occur in the marketplace for a number of reasons, says Garman. One reason is because of "the irrepressible pursuit of self-interest and profiteering by some unscrupulous sellers."

But consumers are not blameless, either. "The most common motivation on the part of consumer is greed; consumers often have a desire to get something for nothing or a lot for a little."

Many Americans today, he says, have a "sweepstakes mentality. Part of the reason is that 34 states have lotteries, and lots of people expect to win something for nothing. In a recent national survey, 11 percent of the respondents said that the best way to get rich was to win the lottery."

When the U.S. Postal Service recently sent out pink-colored "sweepstakes" postcards to 200,000 consumers telling then that "You are a winner!," more than 55,000 called the toll-free number to claim their prize. Those "winners" were played a tape advising them to be more careful about phony sweepstakes.

But, says Garman, it's kind of scary when you think that about 30 percent of consumers reply to contest scams.

Another problem for consumers is that they lack information and knowledge about common deceptions and misrepresentations. "There are just so many," says Garman. "Consumers are going to get ripped off unless they take the time to learn as much as they can."

He offers the following tips and suggestions for consumers:


- Realize that nothing is free. It is almost impossible to get something for nothing. Beware of things that might be too good to be true. Check so-called bargains carefully.

- Know your legal rights as a consumer, especially regarding implied warranties, door-to-door sales, cooling-off periods, charge-back credit regulations, stop-payment check rights and other remedies to correct wrongs.

- Try not to be overly sympathetic to sales representatives, so as to avoid falling prey to deceptive practices.

- Avoid putting yourself in situations where you may be set up to be deceived, such as listening to sales pitches on the telephone or going to motels to hear sales pitches.

- Be wary of purchasing products you are not familiar with from door-to-door salespersons.

- Be alert to commonly used deceptive practices, such as bait-and-switch advertising.

- Be cautious buying anything over the telephone. It is good advice to never buy anything over the phone unless you originated the call or you know the caller.

- Do not act on impulse by making quick decisions to buy or invest.

- Read advertisements thoroughly, looking for limitations in the small print.

- Educate yourself about the product or service you are considering buying and become aware of the likely prices involved. What does it do? What does it not do? Check out such magazines as Consumer Reports, Kiplinger's Personal Finance Magazine, Money, Smart Money and Worth.

- Talk to friends and acquaintances to learn about their experiences with particular sellers, products and services.

- While learning about a product you expect to buy, try to make up your mind as much as possible before you actually go shopping.

- If desired, write to the Direct Selling Association Mail Preference Section, P.O. Box 3361, Grand Central Station, 6 E. 43rd Street, New York, NY 10017-4609, and ask to have your name removed from computer mailing lists. For telemarketing solicitations, write to the Telephone Preference Section at the same address.

- Consider the importance of trade-offs involved in buying good-quality products.


- Buy from reputable sellers that you know. Get the name, address and telephone number of either the salesperson or the company. In door-to-door solicitations, ask for proper identification and carefully examine it.

- Check out the reputation of the seller by contacting the Better Business Bureau, the state Attorney General's Office or an Office of Consumer Affairs. Telephone the same agencies in the state of any out-of-state sellers.

- Ask lots of questions. Ask salespersons to explain advertisements, product operations, warranty terms and so on.

- Get verbal promises in writing.

- Ask telephone solicitors to mail you information rather than discussing it over the telephone.

- Never give your credit-card, checking account or social security number over the telephone for "identification" or "verification" purposes, unless you initiate the call, have been a satisfied customer of the business in the past or are certain of the caller's identity.

- Never send cash, money orders or checks to a post office box or anywhere else unless you are sure about the company.

- Never permit a courier service to come by your home or workplace to pick up cash, money orders or checks.

- Pay no money in advance to obtain a loan.

- Ask to see written warranties and read them. Understand the warranty before buying, such as what it covers, for how long and who will honor it.

- Ask to see the company's written policy on refunds or exchanges.

- Ask what your legal rights are if you later want to cancel a contract.

- Read and understand sales agreements and contracts before signing. Make sure the terms are the same as those given in the sales presentation, and get a copy of the documents.

- If you do not like a particular clause in a contract, say so, cross it out, and get the initials of all parties next to the crossed out portion evidencing agreement that the clause is negated.

- Realize that high-pressure sales tactics are a strong tip-off that you are the target of a scam.

- Once you say "no" to a seller, stick to your position and leave the premises.

- Do not allow yourself to be persuaded and pressured into hurrying and making a quick decision.

- Ask the seller to give you time to think before you make up your mind, perhaps overnight.

- Stop and think before buying. Consider, "Do I really need this?" "Why am I buying this?" "Does something sound a little fishy." "Would I be smarter to ask a trusted friend before buying?"

- Get a second opinion from a trusted friend or advisor on decisions of importance. Always try to get a second estimate for expensive repairs.

- Get an attorney to look over important documents and contracts.


- When concerned about a possible deceptive situation, ask for advice from an impartial third person such as the Better Business Bureau or an Office of Consumer Affairs.

- If you want to check the validity of a telemarketing call, ask the caller to mail you information and ask for a name and number to call back. Then check it out.

- Never pay with cash. To cancel a check with a stop payment order, you need to telephone your bank before the check is presented for payment. If you pay with a credit card, you may have the legal right to not pay your credit card company for poor quality goods and services purchased from a seller.

- If you must act "right now" to take advantage of a deal, don't. On important decisions, wait and talk to trusted friends.

- When in doubt, don't.



Probable ripoffs

The rip-off: Fake checks

The promise: The check made out to you; also stamped "This is not a check"

The reality: Can only be used to purchase overpriced products from a catalog

The rip-off: False gold and platinum credit cards

The promise: $49.95 membership fee for a "similar" card

The reality: Can only be used to purchase over-priced products from a catalog

The rip-off: Unordered merchandise

The promise: Company mails something with the hope that receiving party will pay

The reality: You may keep anything shipped to you and then you can assess the sender storage fees and charges to return the goods

The rip-off: Phony bills

The promise: Bill comes in the mail, perhaps for a deceased relative

The reality: A likely fraud; ask for copy of a signature on order form

The rip-off: Unclaimed funds

The promise: Letter on official-looking stationery saying a "routine audit" has determined that you are owed money; send $35 processing fees

The reality: Only scam artists charge processing fees

The rip-off: Going out-of-business sales

The promise: Sign looks legitimate and the store seems full of goods

The reality: Lots of poor quality merchandise brought in when liquidating a legitimate business; must be licensed

The rip-off: Home improvements and repairs

The promise: Promises high-quality work and must have X dollars as a down payment

The reality: Unlicensed repair persons take the money and run; sometimes they must do shoddy work with poor materials

The rip-off: Free baby photos

The promise: Company offers free baby photos but pressure the consumer to buy expensive photo packages

The reality: Take the free photos and pay an inexpensive service charge; skip the package deal

The rip-off: Magazines

The promise: Young people sell magazines pretending that they are working their way through school

The reality: Either one overpays for the subscription or the "salesperson" disappears with the money