Most people would agree that the United States’ economy is depressed right now. As bad as it is, most of us would have to admit that we are “getting along.” Unfortunately there are some people that are suffering which make them a target for scams and fraudulent behavior. It is often true that when people need money, fraudulent schemes have a better chance of being pulled off.
To begin with let me give you an example of something l get every so often in my e-mail.1
I sometimes get an e-mail that says a rich person from a foreign country has been killed. My name has been “selected at random.” The person killed has left a large estate of several million dollars but the people that are writing me cannot legally get it. Therefore if I send them the number of my bank account they will see that the money is transferred to my account and for helping them get the money into the country they will let me keep half of the money. Of course if I did that they would withdraw everything they could out of my account. There is no “estate.”
Another type of scam consists of a fake company posing as a mortgage rescue company. Let us say you are behind in your mortgage. They indicate they will help you get back to normal for a large upfront fee.2
As a matter of fact you often can get your account refinanced these days for free.
There are many additional ways that these kinds of crooks try to defraud people.
They “guarantee” loans for homes; they guarantee credit card approvals and offer to “let you in” on a bank merger. Once again however the tip-off will be an upfront payment or massive release of personal information.
One other method of scamming the public is trying to hire you as a “mystery shopper.” Once again they want your bank account so they can pay you. Are there legitimate ones? Yes there are but you must be careful.
Additionally there are “work-at-home scams where you can earn “thousands of dollars” in two hours a day. Of course you must pay a fee and give your bank account number.
How can you protect yourself from scams?
There are three rules I follow.
If someone asks me for money upfront then I consider it a scam. Further anytime they want me to “update” personal information or give them my bank account number I will not consider it.
Finally the old axiom “If it sounds too good to be true” couldn’t be more apropos.
I wouldn’t worry about walking away from the “deal of a lifetime.” It is better to live happy and modest than broken.
1. Personal Experience
2. “Protecting Against Fraud,” Article, “Managing Your Money in Good Times and Bad, FDIC Consumer News, Winter 2008/2009