Do your research first: Checking things out before you commit to a deal is a more effective and practical way to safeguard your money than trying to get a refund afterward.
The turbulent financial market may have you looking at alternative investment and money-making opportunities – or maybe they’re looking for you. If there’s a mysterious financial model or an offer promoting miraculous returns, most likely it’s a scam.
Among the business opportunity and wealth-building scams that people have lost money to are the Seminar Pitch; the “Nigerian” Scam; foreign lotteries; and check overpayment scams. Here’s how you can avoid them – and save your money.
You get a letter or see an infomercial promoting a seminar or conference that promises to help you make a lot of money. Supposedly you’ll get valuable information about how to invest successfully or operate a profitable business. The “success stories” and testimonials seem to show that anyone who attends the seminar can make money from the investment or business program if they just follow a few steps. Some promoters even claim to have gotten rich from their own investment in the program.
The Gut Check: Consumers who invest in these “opportunities” usually find that the pay-off doesn’t match the promise – and that they can’t recover the money they spent.
How can you avoid getting hit by a seminar pitch?
Claiming to be officials of a foreign government, deposed royalty from a foreign country, businesspeople or the surviving spouses of former government honchos, con artists offer to transfer millions of dollars into your bank account in exchange for a small fee.
The Gut Check: Stop! Ask yourself two important questions: Why would a perfect stranger pick you – also a perfect stranger – to share a fortune with, and why would you share your personal or business information, including your bank account numbers, with someone you don’t know?
Scam operators convince people to buy chances in supposedly high-stakes foreign lotteries with pitches that generally follow a pattern: you should send money to pay for taxes, insurance, or processing or customs fees. The amount may seem small at first, but as long as you keep paying, the requests for funds will keep coming – for higher and higher amounts.
The Gut Check: Victims lose thousands of dollars. Most promotions for foreign lotteries are phony. Many scam operators don’t even buy the promised lottery tickets. Others buy some tickets, but keep the “winnings” for themselves. In addition, lottery hustlers use victims’ bank account numbers to make unauthorized withdrawals or their credit card numbers to run up additional charges.
Need some quick cash? Thinking of selling a car or another valuable item through an online auction or your newspaper’s classified section? You may get a response to your posting or ad with an offer to use a cashier’s check, personal check or corporate check to buy the item you’re selling. At the last minute, the so-called buyer (or the buyer’s “agent”) comes up with a reason to write the check for more than the purchase price, and asks you to wire back the difference once you deposit the check.
The Gut Check: You act in good faith, deposit the check and wire the funds to the “buyer.” But the check bounces, leaving you liable for the entire amount. The checks are counterfeit – good enough to fool bank tellers.
Check Overpayment Scams (:30)
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