The Top 5 Scams

They donÂ't use a gun, but con artists can still rob you blind. In fact, American consumers were swindled out of more than $40 billion last year. What are the top scams making the rounds these days? The National Consumers League has put together a list, based on complaints they got in 1998. CBS News Consumer Correspondent Herb Weisbaum runs down the top 5 for CBS News Saturday Morning.

The number one telemarketing scam right now is telephone cramming.

It's called that because the bad guys "cram" services onto your bill that you didn't ask for.

It happened to Lawana Johnson. She knew she'd been crammed when her phone bill went sky high with charges for calls she hadn't made and services she hadn't ordered or received.

Johnson says frankly, "I don't know anybody in Ghana, I don't know anybody in Israel, and I really don't need sex lines."

Hers is not an isolated case. It's happening all across the country.

How do the crammers get the bogus charges on your local phone bill?

By lying. They tell your local phone company, which does the billing for them, that you've agreed to buy these services and that you should be charged for them.

So, if they're doing this without your permission, what can you possibly do to protect yourself?

Your only defense against the crammer is to read your phone bill every month as carefully as you read your credit card statements. Question any charge you don't understand and dispute anything that seems wrong.

The second-most common scam these days involves advance fee loans.

You've probably seen the ads: "Need money? No credit? No problem. Have as much as you want for whatever you want." But there's a catch. They want you to pay a fee in advance. Don't do it. You never have to pay money up front in order to get a loan. By the way, according to the National Consumers League, the average victim in this scam loses more than $900.

How can you spot the scam?

It's simple: with a legitimate loan, you pay the fees after you get your money, not before. Steer clear of anyone who wants you to give them money in order to get money.

Number three is another telephone scam. This one's called slamming.

Slammers switch you from one long-distance service to another without your permission. It's happening to millions of people a year. And unless you check your bill each month and look to see who your long distance carrier is, you'd probably never know you'd been slammed.

Is there anything you can do to stop the slammers?

Yes. Call your local phone company and tell them you want to put a freeze on your long distance serice. Also, be careful any time you're confronted with a phone pitch to switch your long distance service. If your answer is no, say no and then hang up!

Number four on the top scams list: bogus prizes and sweepstakes.

The mail is flooded with these things. You know the pitch - you're a big winner. All you have to do is send in a handling fee or pay the taxes on your prize, or buy some merchandise. Foreign lottery scams are big right now. Send us your money... we'll buy you tickets in some big bucks foreign lottery. We'll pool your money with other folks, so you're sure to win. Yeah, right!

So when it comes to contests, what's the rule?

You can't win a contest you don't enter. And you never have to pay to claim a prize, never! No shipping, no handling, nothing. If it's a legitimate contest, it's free to enter. If they want any money, it's a scam. And as for those foreign lotteries, not only is it stupid to send some unknown company your money to buy you lottery tickets, it's illegal to play a foreign lottery through the mail.

And finally, checking in at five... work-at-home schemes.

If you have a mailbox, you've gotten the letters: make big bucks for part-time work and you can make your fortune without ever leaving your home.

Of course, they want money from you in order to get started. Don't do it. Send in your money and you're guaranteed to get ripped off. People do work at home, but they get paid for doing the work. They don't turn around and pay someone else for that opportunity.

How can we fight back against these bad guys?

By not falling for their schemes, and by not giving them billions of dollars each year. Follow these rules and you'll never go wrong:

• Be skeptical. Don't get high-pressured into anything. Check the company out first.
  
• Don't be greedy.
  
• Don't give out personal information, like your social security number, credit card or checking account information, to people you don't know.
  
• Check your bills each month.
  
• Never pay to play a contest or claim a prize.

By Herb Weisbaum
©1999 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed