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‘Mystery shopper’ schemes can bilk the uninformed

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We all know people who would shop all day long if money were no object.

But what if they could do it on someone else’s dime?

Well, that’s pretty much what “mystery shoppers” do – earn a few dollars by evaluating the customer service experience for retailers, restaurants and other businesses eager to hear what they have to say.

By all accounts, it is a legitimate industry with its own trade association – the Mystery Shopping Providers Association of North America – which was founded in 1998 and now represents more than 300 member companies around the globe.

In fact, you can go to the association’s website (mysteryshop.org), plug in a ZIP code and find a list of opportunities near you.

Last week, for example, a search of one Albuquerque ZIP code turned up dozens of opportunities within a 30-mile radius. They ranged from $7 (plus $11 in reimbursement) to “enjoy a delicious hamburger meal on us” to $95 to evaluate a “family entertainment center.”

As you might suspect, then, the mystery shopper industry has become a fertile playground for scams, including some that can cost unwitting participants thousands of dollars.

And New Mexico is no stranger to them.

Connie Quillen, executive assistant to the Albuquerque-based Better Business Bureau Serving New Mexico and Southwest Colorado, says not a day goes by when her office doesn’t get at least one call from someone seeking advice about their “mystery shopper assignment.”

“This is a big one,” said told the Journal earlier this month. “I’m always shocked by the number of people who have no idea” about this scam.

So what is a mystery shopper?

In short, companies hire people to independently assess the customer experience and the quality of their products. In return for a small fee – and reimbursement if the assignment includes purchasing a product – they fill out a report based on their observations that gets forwarded to the business for its consideration.

To be precise, mystery shoppers aren’t really paid to shop; they are paid to gather data and share it with a particular company. And before they accept an assignment, they know exactly what they will be paid in return.

At least that’s how it’s supposed to work.

Given the popularity of the practice – the trade organization estimates there are roughly 1.5 million mystery shoppers today in what has become a more than $1.5 billion industry – it’s no surprise that numerous schemes have arisen over the years to exploit it for personal gain.

Five years ago, for example, the Federal Trade Commission reached a settlement with one fraudulent operation – three businesses and five individuals – for $850,000 in a California federal court.

They were accused of deceptive marketing practices, including charging $99 for what the FTC described as a “worthless certification” that promised access to mystery shopping opportunities that were available to everyone at no cost.

But the most nefarious scheme involves the use of counterfeit checks and money orders to bilk individuals out of their personal savings.

Here’s how one version works:

After responding to a phony ad or email, mystery shoppers receive a check in the mail for, say, $2,500. They are instructed to deposit it in their personal bank account, keep a few hundred dollars as payment for their assignment, then wire back the rest to the person who contacted them or a designated third party.

Everything seems fine until a few days later when the bank calls to notify them that the check is a fake and demands its $2,500 back.

And that’s when the phone tends to ring at the region’s BBB office.

“They still don’t realize they got scammed,” Quillen says. “They think they’ve just got a bad check.”

To protect yourself from the mystery shopper scam, the FTC advises that you don’t do business with companies or individuals that:

  • Solicit shoppers using newspaper help-wanted ads or by email.
  • Make paying for “certification” a condition of employment.
  • Guarantee work.
  • Charge a fee to access shopping opportunities.
  • And, of course, ask you to deposit a check in your personal account, then wire some or all of that money to someone else.

In her experience, Quillen says personal losses from these scams generally fall around the $2,500 mark, though she remembers one instance when a victim’s bank account had to be closed.

“It’s one of those that literally a day doesn’t go by when we don’t hear about it,” she says.

Nick Pappas is assistant business editor at the Albuquerque Journal and writes a blog called “Scammed, Etc.” Contact him at npappas@abqjournal.com or 505-823-3847 if you are aware of what sounds like a scam. To report a scam to law enforcement, contact the New Mexico Consumer Protection Division toll-free at 1-800-678-1508.

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