With the economy still in the slumps, scam artists are finding new ways to take advantage of trusting individuals earnestly searching for ways to make a living. The following list highlights the Top 7 Scams and how to avoid them.
Work from Home Schemes– We’ve all seen them. “Make $5,000 a week working from home.” “Get paid to be a mystery shopper.” These schemes get you to pay for a product upfront that will teach you the “secrets” to living this fabulous new lifestyle. Bottom line is that is that if it sounds too good to be true, it probably is. The end result is that instead of making thousands, you end up wasting your money.
Job Hunter Scams– Watch out for these. These scam artists target job hunters in attempt to steal their identity by gaining access to personal information such as social security numbers, bank accounts, and addresses. Sometimes they may even charge a “fee” to be considered for a job. Don’t fall into this trap. Make sure to research a company carefully before supplying such information.
“Free” Trial Offers – You see them on TV, in magazines, and on the radio. “Free Trial” for weight loss supplements, gym equipment, kitchen gadgets…money back guarantee! These seemingly “no-risk” products often result in thousands of complaints from buyers who state they were repeatedly billed every month and found it extremely difficult to cancel. Don’t expect your money back. If you can’t afford it, don’t buy it.
Debt Relief and Settlement Services – According to tentative year-end estimates, complaints about debt relief and settlement services to the BBB increased by 30% in 2010 and equally so in 2011. Make sure you seriously consider these third party assistance companies as many consumers find themselves paying upfront fees and potentially drowning in even more debt.
Timeshare Resellers– Do you own a time share? Watch out for these tricky schemers. Timeshare owners who are desperate to get rid of their costly vacation property are being targeted by companies that claim they have an eager buyer. What happens is that the company tells the seller they just need to pay up fees upfront to cover the transaction. These fees, however, an be upward it the hundreds, or even thousands of dollars. After paying the fees, the seller never hears from the company again.
Lottery and Sweepstakes Scams– Unfortunately the victims of these scams are often times senior citizens. How it works is that the victim may receive a letter or phone call from someone claiming to be with Reader’s Digest, Publisher’s Clearing House or a phony foreign lottery. The scammer claims that the victim has won millions but first must wire hundreds or even thousands of dollars back to the scammers to cover taxes or some other bogus fee. The victim wires the money and never sees a dime.
Advance Loan Scams– These schemers target students, business owners and consumers who are in debt and in need of a large loan. They claim the victim is pre-approved for said loan however must first pay an upfront processing fee. The victim wires the money, the loan doesn’t show up, and the victim is left even more in debt.
Seek out local financial advice and help from professional investment advisors. You will receive free initial personal counsultation and may easily shop around until you locate the one that’s perfect for you. Getting you IRA or 401k maxed out and growing is an idea that is virtually fail proof. Look into rolling over those old 401k’s into a self directed IRA that will have lower fees and more advantages.
The big lesson to take away is that if sounds too good to be true, it probably is. Secondly, never wire money to someone you don’t know without a thorough identity check first. If something sounds fishy, ask a friend or your advisor what they think. Often, simply a second opinion will be enough to open your eyes. Be cautious, set up a personal budget, seek advice, ask questions, and use common sense. There’s no such thing as a free lunch.
