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- 21 September 2006
Mail Scams
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Page: 2118
Mr ALLAN SHEARAN: My question without notice is to the Minister for Fair Trading. What is the latest information on mail scams targeting vulnerable groups in our community?
Ms DIANE BEAMER: Scams are one of the scourges of our community. Thousands of individuals and companies are scammed each year. Fair Trading investigators are constantly busting scams, prosecuting the operators, and seizing and destroying poisonous pen letters. Fair Trading scored a considerable win over the famous David Rhodes of Perth scam, a chain letter that encouraged people to send $10 to a person named at the top of the list, then send 200 copies of the letter with their name on the list. Hey, presto! Eventually people supposedly would receive a flood of letters in reply, each containing $10. The scheme promised up to $76,000. Working with Australia Post, the Office of Fair Trading confiscated and destroyed more than 600,000 letters—600,000 letters that did not reach their target. Scams, especially mail scams, mostly target the vulnerable—those in need and the elderly. Scams come in all shapes and sizes. Just this week the Parliament passed legislation outlawing false billing. Such scams target businesses and send invoices for goods and services that in most cases either do not exist or are not delivered. Perpetrators of these scams now face the prospect of fines of up to $22,000 for an individual or $110,000 for a company.
One of the best ways to fight scams is through education and information. The Office of Fair Trading has a year-long program visiting schools, community groups, retirement villages, and all manner of other places to present Scamsmart seminars. The Office of Fair Trading's web site devotes a whole section to scams, how to fight them, and how to identify them, naming no less than 70 individual scams—and the list keeps growing. Naming scams in the House today is also a way of informing the community.
Today I wish to bring to the attention of honourable members two new mail scams originating in North America and surfacing in letterboxes in New South Wales. One is a pyramid selling scheme dealing in diamonds and the other is a get-rich-quick contest emanating from Kansas. Both scams lure people with promises of large rewards from a small investment, but in the end they take people's money and return nothing. Canadian Diamond Traders promises huge cash profits and diamonds in return for an entry fee starting at $US100. It is promoted as a legitimate multilevel gem-marketing scheme that is approved in the United States of America and Canada. It has no such approval. It relies on a huge number of people putting money into the scheme in an attempt to move to the top of the pyramid and collect the profits. Canadian Diamond Traders is an illegal pyramid scheme. Any person or company in New South Wales investing in the scheme or promoting it may be prosecuted and fined up to $22,000 in the case of an individual or up to $110,000 in the case of a company.
Contest America Publishers Inc., trading as Opportunities Unlimited Publications, is a Kansas-based company. The company's letters suggest that people can win a guaranteed prize of $13,230 for answering a simple question and by paying a $23 entry fee by credit card. But people are not told it is a game of skill and that they actually have to answer a series of increasingly difficult questions. People have to pay another fee each time they want to progress through the contest, before they are eventually eliminated. The process can take a year. The Office of Fair Trading inspectors have come across people who have paid a $23 fee more than 100 times, convinced that they have the correct answer and will receive a windfall.
No amount of pleading will convince people that they are being scammed. With the Opportunities Unlimited scam there is also a risk of their credit card details being stolen. Perhaps Opportunities Unlimited should rename itself Scams Unlimited. My advice to people who receive letters from mail scammers is to throw the very first letter in the bin. One reply puts you on hundreds of mailing lists for hundreds of scams. The advice I give in relation to all mail scams is: Throw the first letter in the bin!
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