As we warn on the Scambusters home page, crooks have unleashed a tidal wave of scams to cash in on the BP oil leak.
In this issue, we identify the range of tricks, from investment scams and phony jobs, to bogus fund-raising and financial support.
We also have genuine contact details related to the oil leak and additional guidance to avoid these disaster scams.
However, we encourage you to take a look at this week’s most popular articles from our other sites:
Avoid Online Auction Fraud by Following These 5 Simple Tips: By following these few simple online auction fraud tips, you’ll be able to safely take advantage of online bargains and deals galore.Scammers Try Every Which Way To Exploit BP Oil Leak
Whatever the final outcome of the BP oil leak, there’s no doubt that disaster scam tricks related to the incident will, like the clean-up, run for many years.
In fact the cleanup, rather than the oil leak, is the main source of scams that add to the woes surrounding this catastrophe.
This criminal activity spreads the impact of the BP oil leak well beyond the shores of the Gulf of Mexico, tricking investors and would-be workers and helpers out of their money.
Let’s take a look at the main disaster scams linked to the oil leak.
BP Oil Leak Investment Scams
Within weeks of the BP oil leak, the Financial Industry Regulatory Authority (Finra) and the Securities and Exchange Commission (SEC) suspended trading in several companies that claimed to be working with BP on a clean-up solution.
They issued a warning about “pump and dump” schemes (though not necessarily related to these firms) that drive up a company’s stock price before it collapses when claims fail to materialize.
Read more about pump and dump schemes in this earlier Scambusters issue, Investing Safely.
John Gannon, Finra’s investor education chief, was quoted in the Wall Street Journal as saying that investors “need to be careful because those companies may not have the technology or ability to do what they are touting they can do, and may be making claims like having contracts with BP or the Environmental Protection Agency that investors need to be careful about trusting.”
Investment scam warning signs that should put you on the alert include:
* Unsolicited information promoting a stock via email or regular mail.* The stock is traded “over the counter” rather than on the New York Stock Exchange (though, of course, many legitimate companies also trade this way).
If you’re concerned about the reliability of a company you’re considering as an investment you should speak first to your trusted financial advisor and check out the company’s filings with the SEC.
Other BP Oil Leak Financial Scams
BP has set up its own fund to compensate victims of the oil spill.
Now scammers in various guises — bogus BP or government officials, or phony finance companies — have shown up, offering financial help to individuals and companies affected by the spill.
In some cases, they prey on human weaknesses by even telling people who wouldn’t normally qualify for aid that they can cash in.
In most cases, this is an advance fee fraud coming from Nigeria. After convincing you they can get the money, they ask for an arrangement fee.
Read more about advance fee fraud in this earlier Scambusters issue, The Nigerian Scam.
In a few other cases, funding may be provided but at exorbitant interest rates.
Another financial scam recently reported by the Federal Trade Commission (FTC) happens when crooks posing as “adjusters” approach victims of the BP oil leak who already have a claim in the pipeline, offering to expedite their claim, again for a fee.
The fact is that all claims have to undergo a vetting process and cannot be expedited.
For more information on the claims process and how to file a claim, call BP’s phone claims line at 1-800-440-0858.
Oil Leak Cleanup Scams
In addition to dubious investment and financial scams, con artists also focus on theactual clean-up operation, including the costly rescue and cleaning of oil-smeared wildlife by cashing in on public concern and compassion.
Their tricks include:
* Bogus fund-raising — scammers prey on our sympathies and use legitimate or official sounding charity names as a cover to convince people to donate.
The requests arrive by email, regular mail and sometimes by phone, with the caller frequently using high-pressure techniques to force victims into donating.
In a recent variation, crooks launched a lottery scam in which victims receive notification that they’ve won a big cash prize from a clean-up aid fund.
Hard to believe, we know. But BP themselves have issued a warning about this on their website: Recruitment Fraud.
If you want to donate, the Better Business Bureau lists accredited charities raising funds for the oil spill clean-up on its website.
* Malware — you get an email with a supposed photo attachment or a link to a website that claims to have news or pictures from the tragedy.
Clicking on either one could result in a virus or spyware download to your PC.
Resist the temptation to explore!
* “Miracle” cleaning products and equipment, sold door-to-door to waterfront homes.
This is an obvious scam. If such products existed, the clean-up agencies would be using them.
* Phony jobs and training scams – involving both paid and voluntary work. Offers have been posted on sites like Craigslist and sent via email.
Scammers may ask victims to pay for employment information, training or security checks.
They may also ask for confidential personal information, supposedly to check outreferences but in reality seeking information for identity theft.
BP has posted guidance on how to spot and avoid recruitment fraud on its website. Use the BP link given above.
For genuine job information, visit the BP website, the Deepwater Response site (or call them at 1-866-448-5816) or, in the Gulf area, check out your state’s employment website.
Meantime, never pay for employment opportunities or give confidential information to people you don’t know or 100% trust.
The lesson from all of these scams is that for trustworthy information, whether for employment, investment, or financial aid (giving or receiving) you should deal with BP, state governments or established, reputable financial advisers and charities.
If you suspect someone of operating a scam relating to the BP oil spill, call the National Center for Disaster Fraud on 1-866-720-5721. There’s also a BP fraud hotline at 1-877-359-6281.
Goodness knows, the BP oil leak has already wrought havoc on the environment and probably hundreds of thousands of people, without scammers adding to the misery.