It's No Mystery, It's a Scam

Friday, Jul 18, 2008

LITTLE ROCK – Today, Attorney General Dustin McDaniel issued this consumer alert to warn Arkansans about the resurgence of the "secret shoppers" or "mystery shoppers" scam. In the last few weeks, the Public Protection Department of the Office of the Attorney General has received an increased number of complaints and inquiries about this scam, which generally costs each victim between $2,000 and $4,000.

A “secret shopper” or "mystery shopper" is someone who is "hired" to evaluate a retail store's performance while posing as an ordinary consumer. Con-artists advertise in newspapers or send out solicitations similar to an employment packet, which includes forms for the consumer to fill out, a check usually in the amount of $3,000 - $4,000, and instructions to cash the check and use the money to make several small purchases at various well-known retail stores, like Wal-Mart. Once the purchases are made, the consumer is asked to evaluate the retailer's performance and wire the remaining funds to an agent using Western Union or MoneyGram. The consumer is then asked to evaluate the wire services' performance. Upon completing all these tasks, the consumer is told that she will receive a payment for her services; however, victims report that they never receive the promised payment. Additionally, they end up losing thousands of dollars of their own money because they later learn that the check sent to them is counterfeit.

"Nobody minds getting paid to go shopping, but nobody wants to be cheated out of their money," said Attorney General Dustin McDaniel. "I urge consumers to exercise caution and their common sense if they find supposedly free money in their mailboxes, because odds are that it is not free and any participation in the scheme will cost them hundreds or even thousands of dollars."

Attorney General McDaniel also warns that the "free money" scam has many variations. For instance, Arkansans have reported receiving a solicitation notifying them that they have won a home improvement grant. The solicitation comes with a fake check and asks the consumer to cash the check and immediately wire the money for "foreign access taxes" back to the company. While the check is processed by the bank, most victims of this scam go ahead and wire their own money to an unknown agent. When the check bounces, the consumer finds herself with no grant money and no way to get her money back.

Despite the many variations of the free money scam, here are some general tips you can use to avoid becoming a victim:

- If you receive a free check in the mail, your best bet is to throw it away. If you take it to the bank, ask that it be verified and do not withdraw your own funds until the check has cleared, a process that can take days or even weeks.
- Never wire transfer funds to an unknown agent or person.
- Exercise caution when evaluating an employment opportunity, especially if the employer does not appear to use any type of screening process for applicants.
- Never pay any money to claim a prize. If you have to pay, you didn’t win.