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Popular financial scams explained
Some scams are thriving; all are dangerous
There are many people engaged in financial scams that are designed to get you to part with your money. We will look at a few of the most popular scams that are currently making the rounds and explain how you can avoid them.
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Financial scams cost Americans millions of dollars per year. Watch out for these
The Internet and the advance of technology has made it easier than ever to take advantage of people who are careless or uninformed. As a result, the number of financial scams that turn up in the news seems to be increasing daily. Here are some of the most popular scams currently being seen by the authorities and what you should do to avoid them:
- Phishing scams - Phishing is the act of sending out millions of e-mail messages that purport to be from financial institutions. The messages vary, but often appear to be legitimate messages from Wells Fargo, Citibank, Ebay and others. The messages usually indicate that a security violation has taken place and that the recipient of the message must click on a link and submit some personal information to correct the problem. These messages are fakes and are only designed to get you to provide some criminals with personal information, such as your Social Security number or credit card numbers. Real banks don’t send out e-mail asking for your Social Security number. Don’t fall for this one; delete the message. If in doubt, call your bank.
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- Charity scams - This is a form of telephone or telemarketing fraud, where the crooks call on the phone, claiming to be collecting money for some cause or natural disaster, such as Hurricane Katrina. They will ask for a donation by credit card; if you give them your card number they will use your card to make other purchases. Watch out for this one; if you are in doubt, ask them to send their information by mail. They will probably refuse or hang up.
- Senior citizen scams - Many senior citizens are financially secure; many criminals want their money. From this come all manner of investment schemes, retirement plans, annuities, gas/oil investment schemes and even Medicare fraud. Senior citizens, as a group, tend to be less savvy about the use of the Internet and about such schemes in general. If you are over 65, watch out for any investment offer.
- Commodities fraud - With instability abroad comes people offering financial security through unconventional means. You may get offers to help you get rich by investing in gold, foreign exchange (FOREX) speculation or any one of a number of other commodities. Most of these sales pitches come with glowing reports from people who have made huge sums of money quickly. These are risky ways to lose all of your money in a hurry.
- Identity theft - Criminals will do nearly anything to get their hands on your Social Security number or credit card numbers. Protect them carefully and be sure to check your credit report to spot check for unusual activity in your name.
As long as there is money to be made by taking advantage of people, criminals will be finding new ways to do it.
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