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Common Scams
Don't be fooled by these 6 popular scams.
1 - Fake Check Scam
No matter the circumstances, don't agree to deposit a check from a stranger and wire money back. If the check bounces, you'll owe the bank any money you withdrew.
The Bait:
You get a response to your ad or online auction posting, offering to pay with a cashier's, personal, or corporate check. At the last minute, the so-called buyer comes up with a reason for writing the check for more than the purchase price, and asks you to wire back the difference after you deposit the check.
The Catch:
If you deposit the check, you lose. Typically, the checks are counterfeit, but they're good enough to foo unsuspecting bank tellers and increase the balance in your bank account - for a few days. But when the check eventually bounces, you are liable for the entire amount.
What You Can Do:
Never accept a check for more than your selling price, no matter how tempting the plea or convincing the story. If the buyer sends the incorrect amount, return the check, and don't send the merchandise. Consider using an online payment service instead; they often offer more protection for both you and the buyer. If you choose to accept checks, ask for a check drawn on a bank with a local branch. That way, you can visit personally to make sure the check is valid. If that's not possible, call the bank the check was drawn on (don't use a phone number given to you by the person who gave you the check). Ask if the check is valid.
2 - Work-at-Home Scams
If you are considering a work-at-home opportunity, ask questions and do some research before committing any money.
The Bait:
Ads often promise a steady income for home-based work, typically in medical claims processing, online searching, international shipping, rebate processing, envelope-stuffing, or assembling crafts and other items. The ads use variations on these themes:
- Be part of one of America's fastest growing industries.
- Be your own boss.
- Earn thousands of dollars every month from your own home.
The Catch:
The ads don't say you may have to spend your own money to fulfill the terms of the assignment; placing newspaper ads, making copies of documents, or buying supplies, software, or equipment to the job. They probably don't say you won't be paid for all the hours you put in, either. It's hard to find a promoter of home-based businesses who will pay you for all the time and money you spend.
What You Can Do:
Legitimate home-based promoters should tell you in writing exactly what's involved in the program they're selling. Before you commit any money to a home-based business, ask:
- What tasks will you have to do?
- Will you be paid a salary or will you work on commission?
- Who will pay you?
- When will you get your first paycheck; how much will it be?
- How much will you have to pay for the program?
3 - Mystery Shopper Scam
There are plenty of legitimate mystery shopping opportunities out there, but legitimate companies won't ask you to pay an application fee, nor will they ask you to deposit a check and wire money to someone else.
The Bait:
You're hired to be a mystery shopper, and for your first assignment you're asked to evaluate the customer service of a money transfer company, like Western union or Money Gram. You get a check to deposit in your bank account and instructions to withdraw the amount in cash and wire it - often to Canada or another country - using the service. You're told to fill out a report about your experience and send it back, and you'll get to keep a portion of the money as payment.
The Catch:
When the check turn out to be fake, you'll owe the bank the money you withdrew. By law, banks must make the funds from deposited checks available within days, but it can take weeks to uncover a fake check. It may seem that the check has cleared and the money is in your account, but sooner or later the bank will be contacting you to get their money back.
What You Can Do:
Never agree to deposit a check from someone you don't know and then wire money back. The check Will bounce, and you will owe your bank the money you withdrew.
Don't pay upfront fees to a mystery shopper. Instead, search the internet for companies that are accepting mystery shopper applications. Legitimate companies don't charge an application fee.
4 - Lotteries and Sweepstakes Scams
Scam artist often use the promise of a valuable prize or award to entice people to send money.
The Bait:
You get a letter or an email message that claims you've already won a foreign lottery or an online sweepstakes. The letter may be from a government agency, a bank, a well-known national company, or a company you never heard of. Regardless of the return address, the only thing between you and your winnings: a check or wire transfer from you to cover taxes, fees, shipping costs, or insurance.
The Catch:
It's illegal to play a foreign lottery. Any letter or email from a lottery or sweepstakes that ask you to pay taxes, fees, shipping, or insurance to claim your prize is a scam.
Some scammers ask you to send the money through a wire transfer. That's because wire transfers are efficient: your money is transfered and available for pick up very quickly. Once it's transfered, it's gone. Others ask you to send a check or pay for your supposed winnings with a credit card. The reason: they use your bank account numbers to withdraw funds without your approval, or your credit card Numbers to run up charges.
What You Can Do:
An offer to play a foreign lottery can be tempting and fun, but it's also illegal. If a sweepstakes run by an American company is legitimate, you won't have to pay to enter or to win. That's the law. No federal government agency runs or supervises a lottery; regardless, if you have to pay, it's a purchase, not a prize.
5 - Pay-in-Advance Credit Offers
Don't pay for a promise. Legitimate lenders never "guarantee" a credit card or loan before you apply.
The Bait:
You get the "good" news that you've been "pre-qualified" to get a low interest loan or credit card, or repair your bad credit even though banks have turned you down. To take advantage of the offer, you have to ante up a processing fee of several hundred dollars.
The Catch:
A legitimate "pre-qualified" offer means you've been selected to apply for a credit card or loan. You still have to complete an application, and you can still be turned down. If you paid a fee in advance for the promise of a loan or credit card, you've been hustled. You might get a list of lenders, but there is no loan, and the person you've paid has taken your money. It's very unlikely you'll be able to depend on that loan.
What You Can Do:
Legitimate lenders never "guarantee" a card or loan before you apply. They may require that you pay application, appraisal, or credit report fees, but these fees rarely are required before the lender is identified and the application is complete. In addition you're generally required to pay the fees to the lender, not to the broker or person who supposedly arranged the "guaranteed" loan.
6 - Tech Support Scams
In a recent twist, scam artist are using the phone to try to break into your computer. They call, claiming to be computer techs associated with well-known companies like Microsoft. They say that they've detected viruses or other malware on your computer to trick you into giving them remote access or paying for software you don't need.
These scammers take advantage of your reasonable concerns about viruses and other threats. They know that computer users have heard time and time again that it's important to install security software. But the purpose behind their elaborate scheme isn't to protect your computer; it's to make money.+
How Tech Support Scams Work:
Scammers have been peddling bogus security software for years. They set up fake websites, offer free "security" scans, and send alarming messages to try to convince you that your computer is infected. Then, they try to sell you software to fix the problem. At best, the software is worthless or available elsewhere for free. At worst, it could be malware - software designed to give criminals access to your computer and your personal information.
The latest version of the scam begins with a phone call. Scammers can get your name and other basic information form public directories. They might even guess what computer software you're using. Once they have you on the phone, they often try to gain your trust by pretending to be associated with well-known companies or confusing you with a barrage of technical terms. They may ask you to go to your computer and perform a series of complex tasks. Sometimes they target legitimate computer files and claim they have viruses. There tactics are designed to scare you into believing they can help fix your "problem."
Once they have gained your trust, they may:
- ask you to give them remote access to your computer and then make changes to your settings that could leave your computer vulnerable.
- try to enroll you in a worthless computer maintenance or warranty program.
- ask for credit card information so they can bill you for phony services-or services you could get elsewhere for free.
- trick you into installing malware that could steal sensitive data, like user names and passwords.
- direct you to websites and ask you to enter your credit card number and other personal information
Regardless of the tactics they use, they have one purpose: to make money.
If You Get a Call:
If you get a call from someone who claims to be a tech support person, hang up and call the company yourself on a phone number you know to be genuine. A caller who creates a sense of urgency or uses high pressure tactics is probably a scam artist.
Keep these tips in mind:
- Don't give control of your computer to a third party who calls you out of the blue.
- Do not rely on caller ID alone to authenticate a caller. Criminals spoof caller ID numbers.
- Never provide your credit card or financial information to someone who call and claims to be from tech support.
- Put your phone number on the National Do Not Call Registry, and then report illegal calls.
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