At first glance, coupon fraud may not appear to be associated with a serious crime issue. For example, how could a scam involving 50-cent-off coupons actually amount to anything significant?
Well, once you start to understand the numerous types of frauds involving coupons, you might have a different opinion.
For instance, just few years ago, the FBI busted an alleged fraud and money-laundering ring involved in a clip-out coupon redemption scheme that resulted in losses of millions of dollars. Federal agents, including FBI, INS and U.S. Postal Inspectors, arrested 16 individuals in multiple states.
According to media reports, this plan used coupons clipped from newspapers that individuals, posing as store owners, sent to a clearinghouse to have them redeemed to the tune of millions of dollars. The scheme involved over 300 stores, spanned fifteen states, and the investigation was conducted over a 19 month period.
As impressive as the millions of dollars involved in the alleged coupon fraud described above, the Federal Trade Commission (FTC) warns that there are many other coupon scams targeting the average consumer.
Coupons are a big business. Manufacturers distribute nearly 330 billion coupons, worth an estimated $280 billion, annually. Of these coupons, Americans legitimately redeem about 8 billion coupons with a value of $4.7 billion.
There is only one proper way to use a coupon: Cut it out of the newspaper or other source and use it towards the purchase of its designated product.
Sadly, unscrupulous promoters are making money and misrepresenting coupon-based business opportunities to unwary consumers.
The FTC offers these useful coupon scheme “red flags”:
1. Guarantees of big profits, high incomes or amazing savings in a short time.
2. Claims that no risk is involved.
3. Lots of pressure to act now.
4. Claims that this is a hot, “can’t miss” opportunity.
If you are still tempted to get involved in a coupon clipping venture, the FTC advises that you exercise caution, and ask these types of questions – and make sure the answers add up:
1. Ask for details of the company’s refund policy before you invest any money.
2. Ask for the total cost of the work-at-home program, including supplies, equipment and membership fees.
3. Exactly what will you get for your money?
4. Find out who will pay you, whether you will be paid on salary or commission, and when you will get your first paycheck.
5. Get all promises in writing. Any promises you hear should be written into the contract you sign.
6. Check out the company with the consumer protection agency and the Better Business Bureau in your own area, and in the city where the company is located. These organizations can tell you whether other consumers have complained about the work-at-home programs that interests you.
A Quick Security Tip: Checking any company with a consumer agency is not fool-proof, but it is prudent.
7. Find out all the costs and fees associated with getting the coupons – and then do the math. Often, in addition to buying the coupon certificates, you will have to pay hefty postage and processing fees.
For more information, check out www.ftc.gov.
My Final Thoughts: Coupon scam artists use ads claiming easy earnings of “hundreds per week” to lure unsuspecting consumers into their greedy trap.
Always use extreme care when investigating any home business opportunity, including those that involve making money with coupons.
If you believe you are the victim of a fraudulent or deceptive “coupon caper,” contact your local Postmaster, your state’s Attorney General’s Office, and file a complaint with the FTC by calling 1-877-FTC-HELP.
Don’t get “clipped” by coupon fraud.
(Note: If you manufacture or distribute any Security, Safety, Emergency Preparedness, Homeland Defense or Crime Prevention related products, please send information on your product line for possible future reference in this column to: [email protected].)
Copyright 2007 by Bruce Mandelblit
“Staying Safe” with Bruce Mandelblit is a regular column for the readers of NewsMax.com and NewsMax.com Magazine.
Bruce welcomes your thoughts. His email address is: [email protected].
Bruce is a nationally known security journalist, as well as a recently retired, highly decorated reserve Law Enforcement Officer.
Bruce writes Staying Safe, a weekly syndicated column covering the topics of security, safety and crime prevention.
Bruce was commissioned as a Kentucky Colonel -- the state’s highest honor -- for his public service.
This column is provided for general information purposes only. Please check with your local law enforcement agency and legal professional for information specific to you and your jurisdiction.
© 2024 Newsmax. All rights reserved.