What You Need to Know About Money Scams and How to Fight Back


The world can be a tough place for a trusting person. There are hundreds of different scams designed to trick you into giving thieves your money and the personal information they need to steal your identity. Scammers contact potential victims several different ways - via phone, mail and the Internet. But knowing the details of these scams can be a powerful tool for protecting your money and the credit you've worked to build.


Work at Home Scams

With unemployment still high, people are looking for new sources for jobs. One popular fraud is the work at home scam. According to an organization that reviews online job offers, less than 2 percent of work at home job offers on the Internet are legitimate.


Be wary if:

  1. You have to pay upfront fees for supplies, training or access to the job.
  2. You're promised big profits in a short time.
  3. The offer is made in an unsolicited email.

Some of the newest versions of the scam include jobs that promise to pay you to email the license plate numbers of cars parked in your neighborhood and jobs testing a new money wire transfer service.


If you're unsure, research the company and check with the Better Business Bureau. The Federal Trade Commission also has information about job scams on their website.


Advance Fee Scams

There are many versions of this scam. The scammer says if you pay a certain amount upfront, you'll receive a credit card, loan, scholarship or prize. However, once you send in the fee, the scammer disappears. The reality is that although some credit cards may charge an annual fee, it will be reflected on your first bill and is not something you have to pay in order to get the card. In addition, scholarships do not require an application fee. Furthermore, fees associated with loans are usually included in your closing costs.  In another version of the scam, you're told you've won a prize, but need to pay shipping or processing fees to get it.


Be suspicious if you are asked to pay a fee before receiving a product or service - if it seems too good to be true, it probably is. If you are unsure, you may want to visit the physical business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police. (Source: Federal Bureau of Investigation)


Credit Repair Scams

If you're working to improve your credit score, you may encounter services that offer to clean up your credit history. Many charge you a significant fee before they start working. If a firm promises to remove debts you owe, get you a new credit file or Social Security number, walk away. No one can have debts you owe removed from your credit history and no one can legally get you a new credit file or Social Security number.


If you're looking for a reliable credit counselor in your area, you can find one through the non-profit organization National Foundation for Credit Counseling.


Bank Scams

These scams can give the thief access to your bank accounts and information needed to steal your identity. You receive a call, text message or email saying your account has been compromised. When you call back, you're asked to dial in key information like account or PIN numbers.


To protect yourself, always call your bank or credit card company directly using the number on your card or the bank's website to check and see if they have contacted you first.


Protect Your Money and Your Good Credit

Especially in economically tough times, scam operators prey on people's need to bring in more money. The rule of thumb for protecting yourself against financial scams is simple. If something sounds too good to be true, it probably is.


This article is for informational purposes only. For personalized financial advice, you should contact a qualified financial advisor.

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