If it sounds too good to be true - it probably is

There are many ways that consumers can lose their money. Here are several scams that you should avoid.

Pyramid schemes

These scams take a variety of forms but they all depend on inducing people to pay a joining fee with the prospect of earning quick and easy money. Members will benefit from the fees paid by new entrants to the scheme. Basic mathematics dictates that most participants will lose their money. For all members to benefit there would need to be an infinite number of people joining. Pyramid schemes are illegal in the Northern Territory under the Consumer Affairs and Fair Trading Act.

Overseas mailing and internet offers

Consumers in Australia are being hit with a barrage of bogus sweepstake, prize and windfall promotions, get rich-quick schemes and opportunities to purchase over-priced, sub-standard goods which may never arrive.

What to look for

If you receive:

  • a brightly coloured envelope often with words like “extremely urgent”, “confidential” or “by special envoy” stamped on it;
  • a letter or invitations that urge you to participate or buy quickly otherwise the opportunity will be lost;
  • an invitation to participate in any type of lottery or sweepstake, with promoters often saying that the chances of
  • winning are ‘always greater’ than with legitimate Australian lotteries;
  • a request for money before you can learn details of the scheme, often to be sent to a post office box number;
  • uninvited gifts or goods from any source;
  • a request to pay a fee to receive more ‘benefits’ from the same provider;
  • an offer from an unregistered lottery,

then you are probably dealing with a scam.