FINANCIAL fraudsters prey on the gullible and the vulnerable. But one scam has plumbed new depths. A mailing to thousands of homes, purporting to be from a clairvoyant, gives warning that October 9 will bring a terrible event. Victims of the scam are urged to send £19.99 for a lucky talisman to guard their family against this impending evil.

You may think that you would never fall for such a trick, but Britons lose an estimated £1 billion a year to fraudsters operating a range of scams from the clairvoyant letters to fake lotteries and pyramid schemes. We are all gullible and vulnerable potential victims of the organised crime syndicates behind many of these scams.

The Office of Fair Trading (OFT) last month launched a dedicated “scambusters” unit in an attempt to crack down on this flourishing trade. Known officially as the Scams Enforcement Unit, the group brings together law enforcement agencies and other bodies with an interest in tracking down fraudsters.

Mike Lambourne, of the Scambusters team, says: “The OFT identified this as a priority area, as we gained evidence about the scale of detriment to consumers. We have pooled the experts within the UK and international enforcement into one team.”

The scambusters are being kept busy, with ever more ingenious frauds cropping up. The internet, e-mail and the growth of direct marketing are giving the fraudsters unprecedented access to consumers.

The clairvoyant scheme is only one of the scams that has capitalised on the direct marketing techniques developed by legitimate companies to reach consumers. In its original incarnation, the clairvoyant’s letter told the recipients that they were due some good luck and could find out more for a small sum. But it has turned darker of late, claiming that someone close to the recipient is going to die. Mr Lambourne says: “They are sent en masse but are made to look personal and prey on people’s superstitions.”

Although many of us believe that we are immune to scams, evidence from the OFT suggests otherwise. This year the OFT took action against a company that sent out 1.4 million mailings telling people that they had won a prize and could claim it by calling a premium-rate number. More than 190,000 people rang and were kept on the line for up to five minutes at £1.50 a minute. The company bosses netted as much as £1.4 million.

The key to a successful scam is to dupe as many people as possible for relatively small sums. Many victims let their embarrassment overrule their sense of outrage and fail to report the fraud.

Matrix schemes, the heirs to pyramid schemes, fall into this category, conning small amounts out of large numbers of people. In a traditional pyramid scheme, cash works its way up from the bottom of the pyramid as new members join. The details of matrix schemes vary, but typically consumers are persuaded to buy low-cost items, such as mobile phone ringtones, for an inflated price of about £20. After persuading their friends to sign up, they are then put on a waiting list for a “ free gift”. These gifts are usually desirable electronic products, such as iPods, which members will receive when they reach the top of the list. Like a pyramid scheme, however, only those at the very top of the list are ever likely to receive the promised booty.

The OFT has already closed down three internet-based matrix schemes, which between them duped an estimated 25,000 victims in the UK. Mr Lambourne says: “Matrix schemes are an emerging problem area and are particularly targeting young people.”

One of the problems faced by the OFT is that these scams often operate across borders, which makes them harder to trace. Trails often lead to PO boxes, anonymous addresses and prepaid mobile phones.

The OFT urges victims to get in touch, but it is unable to recover cash handed over to fraudsters. So take care. “If anyone asks for money upfront, you should immediately be suspicious,” Mr Lambourne says.

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