From pyramid selling to phishing - as long as people have had money, others try to it take it from them. CAROLINE MADDENexplores how fraudsters use new methods to con consumers

MANY PEOPLE will this week have indulged in childish pranks, played a few practical jokes, orchestrated harmless hoaxes to trick friends and workmates and generally taken full advantage of April Fool's Day, the one day of the year that such behaviour is acceptable.

Every day, though, Irish people are being preyed upon by far more sinister con artists. From seductive get-rich-quick schemes to sophisticated cyber-swindles, professional fraudsters are constantly concocting ever more elaborate traps to relieve unsuspecting individuals of their hard-earned cash.

The world of investing provides a rich hunting ground for unscrupulous scam artists, who exploit the innate human weakness for "too good to be true" offers.

One of the most common "investment" scams is the "boiler room" scheme, where a bogus stockbroking company "cold calls" investors and uses high-pressure sales tactics to coerce them into buying worthless or extremely high-risk shares.

The most recent boiler-room scam to emerge involved Paul Gunter and his daughter Zibiah. The duo ripped off an estimated 15,000 mostly elderly people in the UK to the tune of €45.6 million by flogging them worthless shares in dormant companies.

The Irish Financial Services Regulatory Authority is not aware of any Irish investors burned in this particular scam. However, online discussion boards are littered with recent cases of Irish people being cold-called by companies suspected of being boiler-room operations, proving that investors must keep their guard up.

"If you get offered an investment deal, especially over the phone, always get the name of the firm and check that they are authorised by calling us on lo-call 1890 200 469," advises the Financial Regulator, adding that people will not be covered under any compensation scheme if they deal with unauthorised investment firms.

The regulator publishes warnings about unauthorised firms by name as it becomes aware of them.

Another form of financial swindle, the pyramid scheme, flourished in the Republic in recent years. Pyramid schemes make money by recruiting people. For everyone to profit, there would have to an endless supply of newcomers, which there never is, the National Consumer Agency (NCA) explains.

Sooner or later, the pyramid inevitably collapses, bringing the vast majority of investors down with it. Generally, only those who got on board very early in the process make any money. The Garda estimates that €20 million was lost by investors in two high-profile schemes - the Liberty Chart System in Cork and the Speedball scheme.

"When these operations collapse, people don't just lose a lot of money," the agency warns. "Because pyramid schemes rely heavily on people recruiting friends and family, relationships, friendships and marriages can be destroyed."

People further up the chain are sometimes threatened by angry investors they have recruited, the agency adds.

Apart from the financial and personal impact of becoming entangled in a pyramid scheme, there is another sting to the tail. Since the Consumer Protection Act 2007 was introduced, it is now illegal to participate in or persuade others to take part in pyramid schemes, even if they are in the form of seemingly innocuous chain letters involving very small investments (a common scheme here at the moment).

While pyramid schemes have been around a long time, the internet has proved a swindler's paradise, with many time-worn old cons simply updated and transposed into the online world.

For example, the introduction of chip-an-pin technologies has tightened up the security of credit and debit card payments in stores and restaurants, but it has also had driven fraudsters towards online pickpocketing.

According to Úna Dillon of the Irish Payment Services Organisation, the payments industry's representative body, there has been a huge increase in what is known as "card not present" fraud, which is predominantly internet-based.

With this type of fraud, the thief manages to steal a credit or debit card number, guesses the expiry date until they land on the right combination, and proceeds to rack up online purchases.

Fortunately, unlike those stung by investment swindles, victims of card-not-present fraud will, more than likely, be reimbursed. Online retailers are obliged to verify that the cardholder carried out the transaction and if they can't prove this, they will be liable for the loss.

In the case of phishing - where bank customers are targeted by hoax e-mails that appear to come from the bank's anti-fraud department, aimed at gathering their account details - the bank is not obliged to reimburse people.

However, Dillon says that "just a handful" of Irish people have actually fallen for phishing e-mails, and in every case, they have been refunded by their banks.

Similarly, in cases where an individual's credit or ATM card has obviously been skimmed - eg, information has been illegally copied from the magnetic strip of the card and used to create a fake card and run up charges on the person's account - Irish banks have refunded their customers.

Consumers are always advised to keep a close eye on their bank accounts to spot any unusual transactions and nip theft in the bud. However, according to Dillon, criminals tend to carry out transactions at the weekend, so they won't appear on the person's account until the following Monday or Tuesday.

Even the most vigilant consumer wouldn't be able to spot that their funds were being siphoned.

Fortunately, all banks operate a fraud system that flags unusual card activities and, if the bank is unable to contact the customer to check whether they have in fact gone on an uncharacteristic shopping spree in some far-flung city, they may block the account until the person makes contact.

Identity theft, where a criminal steals an individual's personal information and uses their identity to carry out a fraud, is another problem that has proliferated thanks to the web. Last week, it was revealed that a number of CVs were illegally downloaded from the recruitment website www.jobs.ie, highlighting the ease with which cybercriminals can rifle supposedly private information.

The Office of the Data Protection Commissioner has advised anyone affected by this theft to be particularly careful in relation to any unsolicited contact which they receive either by e-mail, phone or text message. "They should not give out any personal information about themselves on foot of such contact if they have any concern at all about the source," the commissioner adds.

So what can be done to eradicate financial fraud and scams? Dermott Jewell, chief executive of the Consumers' Association of Ireland, says it would help if victims reported such incidents, as their experience would serve as a cautionary tale for others. However, "those who have been caught stay very, very quiet because it's embarrassing", he says.

John Shine, director of consumer affairs at the National Consumer Agency, says that a reluctance to come forward makes scams "difficult to pursue from an enforcement aspect". Many scams operate on the principle of reeling in a large number of people for a small sum of money and rely on the probability that people won't bother to do anything about it.

As long as there are gullible consumers out there, criminals will continue to prey on them.

A spokeswoman for Dublin's European Consumer Centre says that callers inquiring about dubious offers are very reluctant to believe they are dealing with a scam. "They still want to believe that it's not and they try to convince you," she says.

As difficult as it is to pass up on a "sure thing" or a "money for nothing" offer, if it seems too good to be true, unfortunately it probably is.

Information provided by the National Consumer Agency (www.consumerconnect.ie), the Irish Financial Services Regulatory Authority (www.itsyourmoney.ie) and www.makeITsecure.org