7 top scams and how to avoid them

The Better Business Bureau is happy to report that consumers are doing their homework. Inquiries into the trustworthiness of American businesses are up -- "the highest rate in the organization's 100-year history" -- and the overall number of complaints in 2011 was lower than in 2010.

That's good news, but there are still plenty of rip-offs and shady businesses out there. As it has for years, the BBB recently released its list of top scams. Stacy Johnson takes a look at some of them. Check out the video, then read on for more about how to protect yourself.

Although these rip-offs use a variety of tactics and mediums, they all have one thing in common: They rely on impulsive decisions. Since we're all susceptible to well-crafted sales pitches and spur-of-the-moment decisions, it's a good idea to familiarize yourself with some common tricks from the BBB's list.

What happens: You apply for a job online, maybe through a classified listing on Craigslist. You hear back from the "employer" and maybe even do a phone interview. Next thing you know, you're hired. Then you're asked to fill out some paperwork for a credit check or for direct deposit. The BBB says this is "nothing more than a way to capture sensitive personal data -- Social Security number, bank accounts, etc. -- that can easily be used for identity theft."

How to avoid them: Use your favorite search engine to look up the company. Make sure the that company not only exists but that the person contacting you actually works there. And watch out for these red flags in a job posting: a huge salary for "no experience required," the job title and description are so vague you can't tell what it is, or you get a reply from a foreign country that says the company has reviewed your résumé -- when you didn't even send one.

What happens: You're surfing Facebook, Twitter or some other social network where you have a lot of contacts. You notice a friend just shared a link to a video teasing the latest celebrity news with a sensational title -- maybe something like "Justin Bieber's secret 18th birthday video!" You click and get a message that you need to update your video software, which you accept. The next thing you know, your account's been hijacked, and you are posting the same message to your friends. And that's just the beginning of the weird stuff that happens to your computer.

How to avoid them: Don't click on social networking links with sensational titles or ones obviously pandering to popular curiosity, even from people you trust. Instead, right-click and copy the link address. Make sure it goes where you expect, or copy and paste the headline into a search engine to find a trusted copy -- or possibly results explaining that it's a hoax.

What happens: You're on vacation, and in the middle of the night the phone in your hotel room rings. You answer with a mumble and hear the "hotel desk clerk" apologize and explain that there's been a problem with their computer and your credit card didn't go through, so they need your info again. You give it, go back to sleep and later get another rude awakening -- from your bank, asking about some outrageous charges.

How to avoid them: Never give out your personal information over the phone. If a problem comes up, offer to go downstairs and sort everything out in person. In fact, more and more hotels are putting up signs in the lobby, warning about these identity theft attempts.

What happens: Congratulations! Facebook founder Mark Zuckerberg is personally emailing you to let you know you just won a $1 million prize. Unfortunately, there are some taxes you have to pay up front before you can get the money, and you'll need to fill out some paperwork with all your personal details.

How to avoid them: These silly "contests" have been circulating for years. Nobody's randomly selecting your name to give you money. If you insist on making sure, don't click on any links in these emails. Instead, type in the address of the website where you supposedly won and look for a mention of the contest. No need to dig. Presumably, the company would want to promote it in plain sight somewhere on the front page. If you don't see a contest, guess what? And even if you do, use the contact page and ask to talk to a real, live person. 

What happens: Knock knock. Who's there? Why, it's a kindhearted contractor who noticed your roof/driveway/window​s/patio could use some work, and he has some leftover supplies from a job he did right around the corner. He'll cut you a deal so he doesn't have to haul those supplies back home. You give him a deposit or even pay in full, and he promises to come back with the tools. Then he either skips town or actually returns to do the work -- poorly, leaving your property in worse condition than before.

How to avoid them: Don’t be pressured into agreeing to, or paying for, anything on the spot. Ask to see the contractor's license -- not all states require them, but you can see if yours does here -- then get the person's card and say you’ll consider the offer. Next, take the contractor's info and research it. See if he's listed as an accredited business with good reviews on the Better Business Bureau website. If he checks out, take it a step further by calling around for a few price quotes, to make sure you're actually getting a bargain. Be especially wary of these unsolicited contractors after a natural disaster.

What happens: You've heard about a government program to help underwater homeowners work things out with their lenders. So you look it up online. You find a website that asks for an up-front fee to negotiate on your behalf, and you pay it -- only to later find out they never talked to anyone. You're still underwater, and now you've lost precious time and cash.

How to avoid them: Stick to websites with addresses ending in ".gov" (like MakingHomeAffordable​.gov) for reliable information that doesn't cost anything up front. And check out "More help for homeowners: HARP 2.0" and "6 signs of a housing rescue scam" for reliable links and free resources.

While these sites aren't illegal and therefore aren't "scams" in the traditional sense, they're often not what they appear to be.

What happens: You see an ad touting a brand-new iPad 3 for a fraction of the price you've seen everywhere else. You end up at an unfamiliar auction site where you have to pay $1 per bid, and after a bidding war with a few other people that pushes the price up to near retail, you lose out -- and find out you don't get your bidding money back.

How to avoid them: These places are called "penny auctions," which we've written about before. There can be any number of twists that justify the seemingly unbelievable price, from the pay-per-bid model (with a minimum purchase of bids sometimes required, not unlike poker chips) to automatic auction extensions when someone else bids. It may be theoretically possible to beat the retail price, but do some research and make sure that the business is legit -- and that you understand all the rules first.

• Tips to avoid the top 10 consumer problems
• The 10 golden rules of scam prevention
• 5 great credit cards with no annual fee
• Seniors getting scammed by seniors
• Toilet paper scammers flushed out
• Scamming the Nigerian scammers?