Scams are big business. It's estimated British consumers lose around £3.5 billion to scams every year - that's the equivalent of £70 for each adult living in the UK.
In this OFT video, 83 year old Rita reveals she lost her entire life savings to scamsters who bombarded her with mailings.
The people behind these sorts of mass marketed scams are constantly coming up with new ways to target us - whether it's by post, email, or now text - but two key points never change. They're only after your cash. And their promises are usually completely untrue.
The Office of Fair Trading (OFT) has made tackling scams a priority, and commissioned extensive research into who falls for them - and why.
Mike Haley, the OFT's Director of Consumer Protection, says: 'Scammers are finding more ruthless and sophisticated ways to exploit modern tools such as the internet, email or text messaging. These scams can deeply affect individuals and families, sometimes leading to debt, depression, and even suicide. Though anybody can be conned by the scammers, it is always the vulnerable - the oldest or youngest - who end up suffering the most.'
The OFT's findings shatter the myth that it's only the elderly or naïve who are taken in. According to their figures, while it's older people that are most likely to be targeted by the scamsters (and who usually end up handing over the most cash), the age group that most commonly falls for them is 35 to 44.
A DVD produced by the OFT features cases like that of Julie Kingston and her mother Rita (see video clip). Julie discovered 83-year-old Rita had lost her entire life savings after replying to scamsters who'd bombarded her with mailings.
Most mass-marketed scams seem to offer something that sounds attractive, but in reality doesn't exist - a prize in a competition you don't remember entering, an incredible business opportunity, or a miracle cure or treatment. They're very plausible - but there's always a catch - the premium number you have to call to claim your prize, or the up-front payment to secure the best deal.
Once you've fallen for one scam, you could be bombarded with more of the same. Scamsters sell or trade lists of names and addresses, which is why so many unsolicited letters take pains to convince you they've dealt with you before.
New technology offers plenty of opportunities for scams. Most of us will probably have received emails that look like they're from a bank, asking for your account details or even password. And it's all too easy for conmen to set up convincing websites claiming to sell fashionable or hard-to-find goods - we proved how dangerously unregulated this area is ourselves on Watchdog last year.
Even so, it's the tried and tested scams that still swindle the most cash.
The most common scams:
1. Bogus holiday clubs - these cost UK consumers £1.17bn a year with 400,000 victims each losing an average of £3,030. What usually happens is that UK holidaymakers are approached around their resort and offered a scratchcard. Surprise surprise, you've won, but you'll need to attend a presentation to collect your prize. When you get there, you'll be pressurised into joining an exclusive holiday club which almost invariably doesn't deliver what it promises. Some holiday clubs target people with unsolicited phonecalls or mailshots - often with the promise of a free holiday. But what sort of trip are you likely to get from someone you've never met before? The scam's the same, and once again you'll be asked to attend a presentation.
How to avoid it? Don't go. They'll tell you the presentation lasts no more than an hour, but we often hear from people who've been harangued for three or even four, to the point where they've signed up just to get away. As for that free holiday, you'll usually find the dates are limited, and the flights are extra. Remember, these people will say anything to get you into that presentation, and once you're there, their one aim is to get you signed up to something you'll find it very hard to get out of. If you do find yourself facing the hard sell, don't agree to anything on the day. Ask for materials you can take away so you can make your mind up at your leisure - then take the opportunity to do some research on the company. Any that say you can only sign up there and then is one to be wary of and may have something to hide.
There are plenty of investment scams that work on a similar principle; attend their thoroughly respectable presentations and you'll be convinced they'll make your fortune. But don't hand over any money until you've thoroughly checked them out. If they can make you rich, why are you the one handing over money? Read our full report on bogus holiday clubs.
2. Competitions, Prize draw and sweepstake scams - Congratulations! You've won a prize. The only snag is what it will cost to claim it. Typically, you'll get a letter, text or unsolicited call saying you're a winner, but to claim your prize you'll have to ring an expensive premium rate phone line, usually beginning '090' and costing up to £1.50 a minute. Most people only realise they've been fooled when they receive their next phone bill. More than a million people in the UK lose £80m to this sort of scam - an average of £80 each.
Or, you'll get an official looking letter or email saying you've won a large cash prize, but you'll need to pay an administrative or processing fee before it's handed over. Some of these mailings are outrageously deceptive, claiming in huge letters that you - and only you - have definitely won the top prize. Smaller letters elsewhere may reveal all you're really getting is an entry in a sweepstake, or indeed nothing at all. Scams like this cost 380,000 UK consumers £60m every year.
How to avoid it? Don't reply. We all dream of winning something, but ask yourself, how can you have won a competition you've probably never even entered? Those premium rate phone calls can drag on for up to five minutes, and at the end, you'll find your prize is usually poor quality and of limited value. If you're really determined to find out what you've won, companies based in the UK are obliged to provide an address you can write to and claim your prize. You can save yourself the bother by reading the small print on the back of the letter: if there's a list of prizes, but only one holiday, five cars, and '1000+' MP3 players, then it's easy to spot which one you've won. You may have to pay a small handling fee to release the item, and often that's more than the value of the goods; remember - in a genuine competition, it's unlikely you'd have to pay anything to receive your prize. As for those big cash prizes - often accompanied by mail order catalogues - these letters invariably come from overseas, and the claims they make are completely bogus.
3. Miracle health and slimming cure scams - You'll get a mailshot announcing an amazing health breakthrough or miracle treatment. These pills, lotions, creams and other products supposedly cure everything from baldness, cancer, impotency or promise easy weight loss. Around £20m a year is spent on these scam products, some of which might even cause harm.
How to avoid them? A miracle slimming cure? Fat chance. If any of this stuff really worked, we'd have read about it in the papers. Don't be fooled by any of these offers - the testimonials included on the leaflet are often made up, as are the names of the doctors and medical establishments quoted. Some mail order health companies boast about being based outside the UK, but more often than not, that's so they can avoid UK regulations, which should make you wary about what they're putting in their pills - and the claims they make for them.
4. Clairvoyant mailings - They're sent in their thousands, but letters from a so-called psychic or clairvoyant are usually personalised, offering predictions that will change your life - in return for a payment. They may be more sinister, threatening bad luck unless you buy their talisman or amulet. 170,000 of us fall for this every year - 70 per cent of them women - and the total loss of money annually is around £40m a year.
How to avoid it? Put these letters straight in the bin and forget all about them.
5. Fake foreign lotteries - You receive a letter, phone call, or email saying you've won a major payout in an overseas lottery, and are asked to send money to cover administration or taxes. The winnings are never received, and it's a scam that costs 140,000 consumers £260 million every year.
How to avoid it? However official the letter may look (some even use the names of long-established legitimate lotteries) it's all rubbish. How can you win a prize in a lottery you never bought a ticket for? Some scamsters offer to buy winning lines on your behalf, using some great system to pick the numbers; they may not even buy the tickets they've promised you, and they certainly have no way of increasing your chances of winning. They may pretend you've won a small amount and send you low-value cheques so that you'll be persuaded to keep buying more lines. Bear in mind the people behind this scam may just be trying to get your details so they can sell them on. There's a related scam where you'll be called by someone claiming to be a law enforcement officer, who says he's recovered money from you but again, you'll need to pay a fee for the funds to be released. Again, it's all nonsense.
Other useful advice:
We've all heard it before, but the key thing to remember with scams is that old cliché, 'If it looks too good to be true, it probably is.'
Never give any money upfront, or your account details, to anyone who contacts you out of the blue. Only do business with companies you know you can trust.
Just because their marketing looks glossy, it doesn't mean a company is legit; these days anyone can whip up a convincing website or mailshot, so check them out before you're tempted.
Read the small print carefully - and don't be embarrassed to show any letter to someone else to get their opinion.
Don't be fooled by companies that say they'll guarantee you modelling work or small parts on TV or in films in return for a registration fee. It's illegal for companies to make that sort of promise, and legitimate agencies won't take upfront fees.
Signing up to the Mailing Preference Service should help stop any further unsolicited mail. It's free, and you can do it at www.mpsonline.org.uk. Similarly, signing up to the Telephone Preference Service - www.tpsonline.org.uk - makes it illegal for companies or organisations after your business to call without your permission.
Don't let them get away with it! You can report scams to Action Fraud.
Their website has plenty more tips, as well as advice on other common scams.
This page was last edited in November 2012.