Common Scams

Not all attempts to steal your money involves hacking into your bank account or obtaining your personal, financial information. Some scams manipulate victims to willingly part with their money for seemingly legitimate reasons. Below are some of the common scams operating today.

Unfortunately, money lost in these types of scams is rarely recovered. Your best defense against these scams is to be aware of them and take the time to research whether a good or service that seems “too good to be true” is legitimate.

Advanced Fee Loan Schemes

In an advanced fee loan scheme, a person or company offers you a “guaranteed” loan from a legitimate lending institution in exchange for a fee paid in advance. The fee could be a flat rate or a percentage of the gross loan amount. The loan never materializes, and the scammer walks away with the fee you paid.

Charity Fraud

Throughout the year, and especially during the holiday season, scammers will send appeals in the mail or by telephone urging you to contribute financially to a good cause. Double check to make sure the request is from a legitimate charitable organization.

Emergency Scams

Emergency scams (sometimes called grandparents scams) prey on your willingness to help friends and family in need. Scammers impersonate their targets’ loved ones, make up an urgent situation, and plead for help and money. Thanks to social media sites, scammers can offer plausible stories and incorporate nicknames and real travel plans into the con to convince their targets.

Foreign Lottery Scam

There’s a brochure in your mail urging you to participate in some foreign country’s lotto via convenient mail order purchase of lottery tickets or of a share in a pool of lottery tickets. Why not take the chance? It’s a scam. It’s also illegal. A federal statute prohibits mailing payments to purchase any ticket, share, or chance in a foreign lottery.

Free Prize Scam

You’re notified by mail or email that you’ve won a free prize – a new car, a vacation, TV, etc. The catch is you have to pay to get your free item, either by ordering merchandise or by paying shipping, handling, or processing fees to collect the prize. The one thing you can count on is that the amount you pay will excelled the true monetary value of the item – if you receive anything at all.

Home Improvement and Home Repair Fraud

With this scam, you receive a brochure in the mail from a company offering to do expensive home repairs for an unusually low price. Some scammers may even show up at your home to do a free inspection. Unfortunately, the scammer never delivers the services you paid for in advance.

Inheritance Scam

If you receive a notification in the mail from an “estate locator” saying that there is an unclaimed inheritance waiting for you, beware. Many of these recipients are lured into mailing in a fee for an estate report, which will supposedly explain where the inheritance is located and how it can be claimed. The promoter may also offer to process your claim for a fee.

Multi-Level Marketing Jobs

Multi-level marketing is a system of selling goods or services in which you sign up other people to work for you, and they, in turn, recruit others to work for them. You earn commissions on your sales and on the sales of your recruits. But beware if a promoter offers to pay you a commission for recruiting new distributors. Most states outlaw this practice, also known as a “pyramid” scheme.

Mystery Shopper Scam

Scammers will send you a letter and a fake check to entice you to become a paid mystery shopper in your area. The letter instructs you to deposit a check into your account and then wire a portion of the money to a contact named in the letter. But if you deposit the check, you’ll get a notice from the bank that it bounced, and you’ll be out the money that you wired to the scammer.

Online Dating Scams

Scammers may use dating sites, social media, and chat rooms to meet potential victims. They create fake profiles to build online relationships, and eventually convince people to send money to cover travel costs so they can meet in person. They may also play on your sympathies and ask for money for medical emergencies or losses from a temporary financial setback.

Receipt of Unsolicited Merchandise

A company sends you a gift in the mail (a pen, key chain, shirt etc.), but you didn’t order it. They will then follow up with a bill or a letter asking for money in exchange for the gift.

Work at Home Scams

Advertised opportunities to earn money by doing work in your home are most likely scams if you are required to purchase something before you are able to start work. Some scams require you to produce items and then tell you after the fact that you are responsible for selling them. Sometimes the promoters promise to buy back any items you make, as long as your work up to their standards. They will often reject your work as not being up to par, and you are stuck with the product.

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