There are two factors I believe have contributed to the rise of financial scams in recent years:
- The easy access to personal contact information, such as cell phone numbers and email.
- The plethora of advertising of all kinds, both legitimate and false.
Consumers are more bombarded than ever before with advertisements of all kinds, and it can sometimes be difficult to filter which offers and opportunities are legitimate and which are scams. The following are a few common types of scams to look for.
- Get out of debt or pay your mortgage/loan faster. Just about any offer that promises to get you out of debt unrealistically fast is a scam of some kind. Many of these scams require you to pay money upfront which is ‘invested’ in order to yield a ‘huge’ profit you’ll split with the scammer. Loan consolidation and debt elimination offers shouldn’t be confused. Loan consolidation is a very legitimate way to lower your interest rates; whereas get-out-of-debt-now offers usually include hidden fees and unsound financial practices that will cost you more in the end.
- Email scams. Email has replaced telemarketing as the preferred method of proliferating scams. Any email that uses your name, particularly your full name, in the subject title, should be suspect. This is a tactic designed to get your attention and make the email seem official and critical. Any emails supposedly from your bank or other financial institution requesting personal or account information is also a scam – banks will never ask you to submit personal information through this medium. The best way to avoid these kinds of scams is to turn your spam filter on, give your email address out sparingly, and beware of requests for personal or financial information without verification.
- Job payment scams. Some work from home or secret shopper offers will pay you immediately upon signing, which seems legitimizing. However, beware that these checks and money orders are often discovered to be fake, frequently after you’ve already spent the money or paid membership or other non-refundable fees to the company.
- Online auction scams. Even highly reputable auction sites such as Craigslist or eBay still have problems with fraud and non-delivery, not to mention hundreds of other online auction sites. If you’re the buyer, protect yourself by using escrow programs such as PayPal which will hold funds and securely transfer them only when your product is delivered. Be wary of sellers who insist on immediate wire transfers; you’ll probably never see your money or the merchandise again. If you’re selling, beware of overpayment. Some scam businesses will overpay for items using bad checks or money orders and then request a refund via money transfer. Don’t accept payments that aren’t exact.
It can be financially devastating and emotionally demoralizing to fall victim to a scam. Although it’s hard to understand how people can so readily lie, cheat, and steal from others, it’s a reality of life. The best strategy for staying scam-free is remaining informed, using common sense, and exercising caution at all times. Suspect sales pressure and ‘act-now’ pitches. Above all, remember that if a deal sounds too good to be true, it probably is.