The saddest part of a scam is when people fall for it. Although I realize some scams are extremely complex and well thought out, part of me wants to believe that no one actually falls for it. I get at least 15 emails a day inviting me to order some product that will make my penis longer, and I just assume no one actually falls for that. But the emails keep on coming - which leads me to believe that, at least on some level, it must be working.
But today I bring to you my favorite of the sleazy scams. Its not spam, and its not telemarketers. This one is old school.
Today I got a check in the mail for $8.00. Who-hoo! Free money. This is a valid check, I really could go to the bank and cash it. But in the fine print it says "Cashing this check automatically activates your membership in the Great Fun program." As much as I think this is obviously a scam that will in the end loose me money, today I reserved judgment. I mean, who doesn't want "Great Fun?" What if it really is great fun? So I decided to get out my magnifying glass and have a look at some of the fine print. I don't think I've every really examined one of these before, but today I took the time to do it and to share with the blogosphere the results of my research.
Normally a piece of junk mail wouldn't provoke a blog post, but I repeatedly get these bogus checks/enrollment contracts in the mail. It seems to be one of the sleaziest things you could do to make a buck. Especially since your only tip that something is fishy is that fine print. Which, by the way, is more than likely to be too small for the eyes of most elderly people. And since statistically elderly people are much more likely to fall for such things(1) one wonders how this can be legal.
But hey, it's the "Great Fun Program!" Who wouldn't want to be in this program? So lets investigate a little bit more.
The first thing I find that I am particularly saddened by is that this is coming from a credit card company: Household Bank. I have a credit card through them, which by the time you read this post will have been cancelled. So, how can my credit card give me "Great Fun?" Here are the nuts and bolts as detailed in the accompanying paperwork:
You will automatically receive a 2% kick-back on your first $5,000.00 of new purchases. And, you can look forward to receiving a check for up to $100 each year you are enrolled. Cool. Not too shabby.
2% of 5000 is 100, so that’s $100 bucks of free money once a year! Woot!
But, not quite. I skipped a really, really tiny subscript "1" after the bit about "2% automatically on your first $5,000." Skip down to more fine print: In actuality, you can earn this 2% back on UP TO $5000 a year, only. No more. And, you don't just automatically get the money in your account. That would simple for a big credit card company to do. However, for the "Great Fun" program, you have to gather up your account statements for every month, and once a year, within 90 days of when you initially enrolled in the program (read: signed that bogus check), you have to mail them in, and then you will at some point receive a check in the mail for up to $100.
That doesn't sound like some serious happy - but wait until I tell you the fun. The Fun part of this program is that the enrollment fee is an annual (sound the trumpets) : $99.99! I couldn't make this stuff up if I had to. And lets just add insult to injury: if you say nothing, the enrollment will continue a second year, at which time the price of it goes up ti $109.99.
I know it goes without saying, but lets do the math.
+ $8.00 (your enrollment gift)
~ one year later ~
+ $100.00 (assuming you do all the paperwork correctly)
- $99.99 (your membership fee)
========
$8.01 (the absolute maximum you have made through this program)
~ one year later ~
+ $100.00 (assuming you do the work again)
-109.99 (second year fee)
======
-$1.98 (the absolute maximum you could have made in this program)
So, after two years of keeping track of all this paperwork and mailing in all this information you have successfully LOST $1.98. We could factor in the postage for your two mailings, but I think I've exhausted the ridiculousness of this scam.
(1) From page 8 of the U.S. Department of Justice Office of Community Oriented Policing services report titled Financial Crimes Against the Elderly (link: http://www.cops.usdoj.gov/mime/open.pdf?Item=963) [pdf]
"several national organizations have completed
studies offering various ways to quantify the rate of
financial crimes against the elderly. Some of these focus
on consumer fraud, estimating that somewhere between 20
and 60 percent of adult Americans have reported being
the victim, or attempted victim, of it. "