It is estimated that more than 25 million people find themselves as victims of fraud each year. This includes everyone from the elderly, to well-educated young adults.
The Federal Trade Commission found that the most-reported frauds involved weight loss products, prize promotions, unauthorized billing for buyer’s clubs or internet services, and work at home programs.
The reason scammers are so successful is not due solely to the naivety of the person targeted. It has to do more with scammers being so good at manipulating their prey.
The root of many scams is making or saving money. Scammers have a frighteningly keen awareness of this.
The best of them structure their schemes knowing that there is wide swath of consumers who are willing to risk their hard earned dollars, no matter how far-fetched the scheme seems.
In this post, we’ll examine some of the factors that allow scammers to succeed in duping the unsuspecting. Because people are prone to falling victim to scams when they want to save or make money, we’ll also give you some of the tactics that you should consider to be red flags when spotting scams.
Our goal in this post is to bring you key information for avoiding scams by recognizing them immediately. Furthermore, we’ll highlight for you the many red flags that you should understand in knowing when you’re about to be, or have been, a victim of a scam.
Preying on consumer desperation
Scammers are opportunists who often look to societal happenings as ways to line their personal financial coffers.
As noted above, there are some scams that are so prevalent that they have earned a place on several consumer watchdog and government lists. The tried and proven nature of these scams make them go-to practices for fraudsters.
Following the 2008 housing collapse, fraudsters saw that the level of foreclosures would rise. Fraudsters realized this was an excellent opportunity to swoop in on desperate homeowners with promises of helping them to save their homes.
Their scams have included requesting fees in advance with the promise to the homeowner that they would stop the foreclosure. In these cases, most of the homeowners never saw their money again, nor did they ever hear from the fraudster again.
Also, be aware that you are likely being duped in an advanced fee scheme if it has anything to do with Nigeria. So dubious and prolific in their nature, these schemes have made myriad warnings lists.
As explained by the U.S. Securities and Exchange Commission, in these schemes, someone pretends to be a Nigerian official or business-person. Know you could be, or you’re being, victimized if the person asks you to help them move money out of Nigeria in exchange for “high, hassle-free profits.”
Tell-tale signs of this scam include unsolicited mailings, faxes, phone calls, and e-mails.
Pay now and then we’ll get started
Advance payment schemes made the FBI’s “most common types of scams” list.
The FBI points out that these agreements can actually turnout to be legal if the so-called finder proves that they never intended to, or was able to, provide any financing.
That’s frightening. The scammer schemed to dupe someone out of their money. They also likely covered their bases with another way to evade the authorities.
Don’t let financial jams make you vulnerable to scammers
When it comes to offers to help you get out of financial jams, there are red flags to be aware of.
Did someone ask you to sign a contract that entails a so-called “finder’s” fee? If so, they may be scamming you. Too often victims learn that they are ineligible for financing only after they have paid the “finder” according to the contract.
Also, know that a scheme is in the works if the offer entails nondisclosure or non-circumvention agreements.
The FBI notes that scammers design these types of agreements for a reason. They do so to prevent you from independently verifying the bona-fides of the people with whom you’ll be doing business.
Con artists often use non-circumvention agreements. They threaten their victims with civil suits if they report their losses to law enforcement, according to the FBI.
That gut feeling
Perhaps the best type of scam detector is your gut. It’s that feeling you get when something just isn’t right.
That feeling, along with the offer being “just too good to be true,” can help you to avoid being scammed.
The website Scam Guard gives examples of these types of offers, including:
“Money left to you from an unknown relative; being awarded a loan or grant you haven’t applied for; winning a lottery you’ve never entered; and being selected to receive a share in funds in return for using your bank account.”
Do this or else you’ll miss a great opportunity
Scammers will often place pressure on their prey to agree to their offer immediately, or it will pass you by. This often works as they know that few want to pass up a great opportunity when it comes to money.
The pressure tactic is largely seen in get rich quick schemes, such as investing. The fraudster will guarantee a certain return percentage, which is usually astronomical. Don’t let greed lead you to fall for a scam that will cost you money instead of earning you money.
If the person offering you the deal is eager that you comply immediately, without allowing you time to do your own due diligence, walk away.
We took a look at the FBI’s website on scams and we found this statement to be spot on.
“The variety of advance fee schemes is limited only by the imagination of the con artists who offer them.”
At the end of the day, there is rarely a perfect solution to a financial problem. If your credit is in a rut, and you’re looking for a company to help, make sure you’re working with one of the best credit repair companies for your situation.
If you’re low on funds, stay on-guard and shield yourselves from potential online (or offline) scams. On that same note, there is rarely a perfect way to become rich with little effort unless there’s some kind of illegal activity going on.
Check the legitimacy of the person/company making the offer through a search on the internet. Add “scam” to the end of the name, and see what comes up. If there are plenty of results, ignore the offer.
Go to websites like those of the FBI and FTC that have a wealth of information on the latest scams making the rounds. They also provide ways to report them if you have been a victim.
And as with all offers, keep in mind the rule of thumb that says:
“If it is too good to be true, it probably is.”