Common Scams

Money-making schemes

Typical scheme letters claim a huge amount of money is available overseas and the letter writer simply needs a deposit upfront to access it. If the recipient forwards cash, they’ll gain a big cut of the supposed overseas bounty. Sometimes the schemer will even send “payment” in the form of a fake cashier’s check.

Pyramid schemes involve recruiting several others to pay money to join a club or business and encouraging them to bring more people onboard. The money is channeled to the person at the top of the pyramid, who is expected to then step aside and allow the next person in line to move up. Unfortunately the creator of the pyramid typically takes the money and runs.

Community caution: If it’s an easy way to make money, it’s probably illegal, a scam, or just a bad idea.

Online auctions

Online auctions may offer an extremely low price on an item, request cash or money order payments, or instruct the buyer to send funds to an escrow company. Items priced too low may indicate fake, stolen, or bad merchandise. Or the items purchased may never arrive. Cash and money order payments are untraceable and escrow company fronts are easily faked.

Community caution: Approach all online auction transactions with caution. Pay for such items with a credit card and never buy anything online from someone who approaches you through instant messaging or e-mail.

Employment scams

Among the most notorious employment scams are recruitment for an illegal job and upfront fees for employment leads. An illegal job example is a “re-shipper,” who receives packages at home and pays out of pocket to reship overseas. Similar to advance fee and prize scams, a job or job lead is sometimes promised once an upfront fee has been paid. Or, an “employment service” may request a fee for a uniform.

Community caution: Use employment services that charge the employer, not the potential employee. Don’t pay fees for uniforms. If a uniform is required, request that the fee be taken out of the first paycheck. Ignore offers that promise insider information for federal government jobs.

Advance fee scams

Consumers are asked to pay a fee in advance for receiving a credit card, loan, or scholarship. In return, the scammer either disappears or forwards worthless junk.

Community caution: Never pay in advance for a credit card, loan, scholarship, or scholarship search.

Bogus charity

E-mail has made it easier for scammers to set up bogus charities. These days, even e-mail messages and Web site links may look legitimate.

Community caution: Never give payment information to anyone who calls or e-mails claiming to represent a charity. Instead ask them to send detailed paperwork about their organization, then research the organization online and with the Better Business Bureau. If the charity representative pressures you to give immediately, be suspicious. Legitimate charities withstand scrutiny and never hesitate to prove who and what they are.

Prizes that come with a price

Letters or e-mail messages telling consumers they’ve won something, even if they haven’t entered a contest, are a common scam. Most require some other type of purchase, request cash, taxes, or handling fees, or require a lot of personal information before the prize is awarded.

Community caution: If you didn’t enter, you didn’t win. Never pay anything up front for a prize, and don’t provide personal information such as a Social Security Number.

Products too good to be true

Like money-making scams that sound too good to be true, product and service offers may ring with the same false tone. Scammers may claim they’ve found a way to skirt the law, such as:

• A way to avoid paying bills or taxes
• Promises to clean up credit history
• Claims of supplying a new Social Security number or a new driver’s license to replace one that has been revoked

Community Caution: Once again, if it seems too good to be true, it probably is. Common sense is always the best defense against scammers.

Content modified from BankRate.com