Scammers are often considered the least skilled criminals. However, it is good to bear in mind that the highly skilled scammer will be considerably more careful, subtle and craftier than some other types of criminals. We may not realize that anything has happened until after they are long gone. Scammers use manipulation tactics which can include relationships, investments, fake business and talent opportunities, and many other forms of false information to take our hard-earned money.
The motivation of scammers is almost universally financial in nature, although occasionally one will just be psychologically manipulated for some unhealthy need for attention or validation on the part of the criminal, as in the story of the mentally ill woman in Wyoming a few years ago who manipulated celebrity music artists with false stories about her child dying of cancer in the hospital just to get attention and empathy. Scammers exist to, in one fashion or another, separate their victims from whatever items of value that they might have. This might mean actual currency, information, physical objects, or any number of other means their victim possesses.
Common Types of Scams
- Attempts to gain your personal information:
Scammers use sneaky approaches and steal the data. Once obtained, they use your identity to commit fraudulent activities like gaining a credit card or opening a bank account or online sales club.
2. Buying or selling:
Scammers prey on consumers and businesses that are buying or selling products and services. The scammer will create a false product or service they pretend works, but instead take the customer’s money and never deliver the product or service. These scams are common on Kickstarter.
3. Dating & Romance:
Scammers take advantage of people looking for romantic partners via dating websites, apps or social media, and they pretend to be someone they are not. They play on emotional triggers to get victims to provide money, gifts, or personal details. This is also known as “catfishing”.
4. Fake charities:
Scammers impersonate genuine charities and ask for donations, or they contact you claiming to collect money after natural disasters or major events.
5. Investments:
If you’re looking for a fast way to make money, watch out – scammers have invented all sorts of fake money-making opportunities to prey on your enthusiasm and get ahold of your cash.
6. Threats and extortion:
Scammers will use any means possible to steal your identity or your money – including threatening your life or ‘hijacking’ your computer.
7. Unexpected money:
Scammers invent convincing and seemingly legitimate reasons to give you false hope about offers of incredible sums of money. There are no get-rich-quick schemes, so always think twice before handing over your details and dollars. Anything that asks for money up front in order to get money is undoubtedly a scam.
What You Can Do to Avoid a Scam
Block unwanted calls and text messages.
This is pretty self-explanatory, but know your contacts and keep a tight handle on who has your information and who you respond to. Have trusted sources for business dealings, and get personal referrals from your networks.
Don’t give your personal or financial information in response to a request that you didn’t expect.
Legitimate organizations won’t call, email, or text to ask for your personal information, like your Social Security number, bank account, or credit card numbers.
If you get an email or text message from a company you do business with and you think it’s real, it’s still best not to click on any links. Look at the email address sending you the email; is it the company email? It’s usually not. If you have doubt that it is genuine, then contact them using a website you know is trustworthy, or look up their phone number. Don’t call a number they gave you or the number from your caller ID, instead call the official number registered as the business number, or the real number for the IRS in IRS scams. Go directly to the web browser and log in rather than click on any email links.
Resist the pressure to act immediately.
Legitimate businesses will give you time to make a decision. Anyone who pressures you to pay or give them your personal information is a scammer. Make a rule to think something over at least overnight. It is clarifying to step away from the situation to let things settle and be certain about your decision before you make a plan to send money. There is no investment that can’t wait for a good night’s sleep. Make sure you have people in your life whom you can trust, and ask them what they think. Show it to a trusted source, weigh your options, pros and cons, and then make the decision.
Know how scammers tell you to pay.
Never pay someone who insists you pay with a gift card or by using a money transfer service. Never deposit a check into your account and then send money back to someone. This is always a sign of a scam. No legitimate person will ask you to invest by selling crypto to them for some price higher than what it’s worth. Always ask the question, “Is it too good to be true”? It likely is.
Years ago, when I lived in Miami, I was looking for someone to rent my efficiency studio. Someone answered my advertisement with a good story–she was a nursing student and needed to secure a place to live before moving from the UK to the US. Her spelling of words was a bit off, but I assumed English wasn’t her first language so gave her the benefit of the doubt. She sent me two cashier’s checks for me to deposit. It was odd, I didn’t understand why she would send cashier’s checks so I called the cashier at American Express and checked the numbers. Turned out it was a scam. My next call was to report it to the FBI.
Stop and talk to someone you trust.
Before you do anything else, tell someone; a friend, family member or neighbor about what you’re being offered. Talking about it could help you realize it’s a scam.
What Scammers Do With Your Personal Information
With your personal information, scammers can:
- access and withdraw your bank account assets
- open new bank accounts in your name and take out loans or lines of credit
- take out phone plans and other contracts
- open purchase clubs and then let them go to collections
- sell a false item in your name on eBay and not deliver it, using your name to scam another unsuspecting buyer
- purchase expensive goods in your name
- steal your retirement assets
- gain access to your government online services
- access your email to find more sensitive information
- access your social media accounts and impersonate you to scam your family and friends, or strangers
- steal your identity and Social Security number and sell it on a foreign black market
Warning Signs
Before stealing your identity, scammers will target your personal information. Watch out for the following signs.
- You receive an email, text or a phone call out of the blue for personal information.
- You receive an email or text asking you to ‘validate’ or ‘confirm’ your personal details by clicking on a link or opening an attachment. The message may be poorly written or contain grammatical errors. This is called a phishing scam.
- Unexpected pop-ups appear on your computer or mobile device asking if you want to allow software to run. This can be malware or other computer viruses that compromise your information.
- You receive a friend request from someone you don’t know on social media.
- Your mailbox has been broken into.
Warning signs that your identity has been compromised
- You are unable to log into your social media or email account, or your profile has been logged into from an unusual location.
- You notice that amounts of money go missing from your bank account without any explanation.
- You have an unexplained purchase on your credit card.
- You are refused a financial service or an application for a loan or your credit card has been declined.
- You receive bills, invoices or receipts addressed to you for goods or services you didn’t purchase yourself.
- You are contacted by businesses or individuals who believe they have been dealing with you even though you have had no contact with them.
If you were scammed or think you saw a scam, report it to the Federal Trade Commission.
Always be careful about the people who come into your life; it’s often difficult to know who is trustworthy and who is not. There are many red flags, and you have to be vigilant. I have a friend who made a friendship years ago with an average guy with incredible stories. She didn’t tell me much, but I talked to him on the phone once. I could tell something was off about him because he made elaborate stories that felt strange. Two years later she told me how he got fifty thousand dollars from her for some investment scam he was working on for her. I asked why she didn’t tell me before paying–why didn’t she ask for advice? Her answer was that she believed it was going to be amazing and she wanted to surprise everyone with presents when the investment paid out. From what I’ve read, this is a very common response from victims. They think they have an incredible opportunity, and in their good nature they want to share their winnings, but in all the excitement they forget to share the investing ideas with others who may have reflected to them how actually incredible, or rather impossible, the idea was. She lost fifty thousand dollars, which was her whole savings.
Signs you’re being scammed:
They don’t want you to tell others, sometimes they will even keep you from friends and family.
It’s too good to be true. You know it is; it’s way too perfect, but they have some smooth-talking story about why it’s the right move.
Something feels wrong, and you get a weird gut feeling. You need to tell someone else and show them the details. An outside perspective could save you loss of time and resources.
They are asking for money from your savings, or for you to get a loan. There is no way you should ever invest any money you aren’t willing to lose. If you’re investing all you have then it’s not the right investment for you; simply say “no” and move on. No opportunity is so good that you should use your savings or get a loan. Set a firm boundary and end it right there. Only invest or loan someone money that you’re willing to never see again.
Use these tips to think through any decision. Scams are everywhere, even on mainstream investing and educational services. You have to be careful these days; it’s a weird time since so much happens online in the virtual world and not face-to-face.
Be safe, be smart, and think it through before doing anything. My dad would always say, “Think before you do so.” Set yourself a rule that requires you take a set amount of time to think something through. One day, two days, or a week, whatever time you feel it takes you to gain clarity about big decisions, and make sure you keep that rule. “Sleep on it”, and make that your rule for all opportunities.
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