How to Spot an Internet or Phone Money Scam

iStock.com/PeopleImages

How to Spot an Internet or Phone Money Scam

How to Spot an Internet or Phone Money Scam

Don’t be fooled by these common scams
How to Spot an Internet or Phone Money Scam

iStock.com/PeopleImages

We read in the news how scams and shams plague businesses and individuals who entrust their savings to the wrong people. But it’s difficult to fathom how such a threat could ever impact us or anyone we know. Here’s the truth: the possibility of being scammed is more likely than you might think. 

According to the Federal Trade Commission (FTC), more than 1.4 million fraud reports were filed in 2018 and nearly $1.5 billion was reported lost. And while an aging myth might suggest older individuals are the only group susceptible to fraud, 43% of individuals between the ages of 20 and 29 reported losing money to fraud in 2018.

A scam can impact anyone at any age. The best way to stay ahead of a potential threat is to know the signs. Here are a few tips to help you protect your name and your pockets from potential scammers.

You’re pressured to ‘act now’ regarding a deal

You’re pressured to ‘act now’ regarding a deal

iStock.com/fizkes

According to the Consumer Financial Protection Bureau (CFPB), one of the classic warning signs of a possible scam is when a contact, either through phone or email, pressures you to “act now” or face the possibility that you’ll miss their great deal. They might also brush off your questions or refuse to answer your inquiries with the excuse that someone else will snag their offer.

You’ve won a lottery or sweepstakes you never entered

You’ve won a lottery or sweepstakes you never entered

iStock.com/JohnnyGreig

You’re sitting at home when you receive a call from a U.S. government official. They have great news: you’ve won the grand prize of sweepstakes or lottery. In order to collect the prize, however, you have to act now and pay taxes upfront. After they’ve received the payment, the prize will be yours. So you submit the payment … and you never hear from them again. The CFPB warns that this is a common, elaborate scam. And according to the FTC, imposter scams were one of the top reported threats in 2018. The CFPB never calls people about winnings, so if you’re being contacted by someone claiming to be an employee, chances are it’s a scam.

You owe an unknown debt

You owe an unknown debt

iStock.com/PeopleImages

If you’re working to rebuild your credit score or are mastering the skill of budgeting, you might have a few debts under your belt that you’re hoping to eliminate. Debt collectors are known for calling to assess how to best work with you to arrange payments. But if you’re receiving calls for a debt you don’t owe, have already paid off, or have never heard of, it might be a scam. If the collector threatens you with criminal charges or is unable to give you information about the debt, the CFPB warns that these are also signs of a threat. If you suspect that your caller is a scammer, ask for a licensing number and a validation notice to prove a debt is owed.

You’re offered debt resettlement

You’re offered debt resettlement

iStock.com/PeopleImages

Debt accumulation can affect our relationships and way of living. So when a debt settlement company gives you a call, it might feel like the light at the end of the tunnel. But according to the CFPB, offers to renegotiate, settle or change the terms of your debt could be fake. And if you’re asked to pay a fee before you’re helped, the FTC warns that this is a sign of a scam.

You’re promised foreclosure relief

You’re promised foreclosure relief

iStock.com/skynesher

Victims of foreclosure relief scams are not only at risk of losing their funds but their homes as well. A scammer might ask you to sign over the title to your home or make a false promise to save you from foreclosure if they’re paid a high fee upfront. Don’t fall victim to this trap. The CFPB recommends calling a U.S. Department of Housing and Urban Development (HUD) approved housing counselor to help you pay for your home and dodge the risk of foreclosure.

You’re contacted by an unknown relative

You’re contacted by an unknown relative

iStock.com/DGLimages

When a family member is in need, your first instinct might be to help as best as you can. But if you receive a call or email from a grandchild, sibling or distant relative and they desperately need you to immediately wire funds to help them evade trouble, the CFPB warns that this might be a sign of a scammer. Scammers often ask to be paid in a way that will make it hard for you to get your money back — such as wiring money or putting extra cash on a gift card. If you’ve never heard of the relative before or you’re being contacted from an unknown number, hang up and don’t transfer any funds.

You’re told to send money to a government official

You’re told to send money to a government official

iStock.com/Pollyana Ventura

According to the CFPB, imposter scammers pose as trusted government officials — like sheriffs or local government employees — and attempt to convince you to send money their way. Just because you live in a major city and the caller ID lists the person’s name doesn’t mean it can’t be a scammer hoping to strike big. Call the government agency to verify that an official is contacting you.

You’re promised help with starting your business

You’re promised help with starting your business

iStock.com/fizkes

With the right tools, you can turn your hobby into a full-time job. But if you’re being contacted by a business coach who wants to help you get your foot through the door, research the business opportunity rule, enforced by the FTC, before signing any documents. The business opportunity rule protects business owners by disclosing practices that are illegal for a company to perform. The rule also requires sellers to provide a one-page disclosure document outlining facts about the proposed business opportunity, and a separate document about their money-making claims. If your contact cannot provide any of the former necessary documents, chances are it’s a scam.

You’re called about investing in a new business

You’re called about investing in a new business

iStock.com/RyanJLane

The business opportunity rule also protects consumers from scammers claiming to be businesses searching for investors. Under the rule, it’s illegal for sellers to falsify the nature of the investment they’re proposing. Don’t provide confidential information, like credit card numbers or bank statements, before you’ve done your research, consulted your financial planner and contacted the State Consumer Protection Offices.

You’re told to send money by mail for a reward

You’re told to send money by mail for a reward

iStock.com/sturti

Mail fraud letters will require you to send money or personal information in exchange for something valuable — like a new car or that swimming pool you’ve always wanted. Never send money or personal information like your credit card or social security number to an unknown party.

You’re asked to share access to your computer

You’re asked to share access to your computer

iStock.com/amenic181

Never grant external access to your computer to someone who claims to work for a reputable company. In a new phishing scam experienced by Apple users, a person claiming to be a representative from the company insists the caller’s personal information has been compromised. In order to keep you and your data safe, the representative asks to be given access to your computer via downloadable software so they can effectively solve the problem. But here’s a tip: if any stranger is asking to have remote access to your devices or your passwords, it’s a scam in progress.

You’re told to pay a fee before being offered a new job

You’re told to pay a fee before being offered a new job

iStock.com/SrdjanPav

If your current job is burning you out or you just want a change of pace, you might jump at a new opportunity. Job recruiters are known for posting openings on job board sites and contacting potential candidates who they feel will be a great fit for a new role. Unfortunately, scammers can also advertise jobs where legitimate sources post. According to the FTC, if you have to pay for training materials, certification or expenses before landing the gig, the opportunity is a scam. The FTC also warns to not supply bank or credit card information to a potential hiring manager over the phone. If the opportunity feels off, trust your gut. Research the opportunity and, if it is a scam, immediately file a complaint.

You’re offered credit repair

You’re offered credit repair

iStock.com/EmirMemedovski

There are plenty of steps that can be taken to boost a low credit score, but consulting an unknown contact who claims they can repair your credit isn’t one of them. Scammers might offer to lower credit card interest rates or forgive student loans after you pay their company a flat fee, but instead, they can take your money and ruin your credit.

You’re contacted about donating to a charity

You’re contacted about donating to a charity

istock.com/Drazen_

According to the FTC, people requesting donations for disaster relief efforts is a popular phone scam. If you do receive a call, research the charity’s name, report and rating, and never pay by wire transfer or gift card. Donating to charity is a great way to show gratitude, but don’t get scammed along the way.

Your new romantic interest asks for money

Your new romantic interest asks for money

iStock.com/FatCamera

More than 21,000 romance scams were reported to the FTC in 2018, and a total of $143 million was lost. Scammers might form a virtual, romantic connection and ask to be wired money for a doctor’s appointment, travel expenses or gambling debts. If you suspect you might be on the receiving end of a romance scam, put a stop to the romantic adventure and cease communicating with the person immediately.

You’re told your car warranty has expired

You’re told your car warranty has expired

iStock.com/PredragImages

Be wary of phone calls and emails that claim the warranty on your car has expired or will expire soon. The representative contacting you might claim they work for your car dealer and use urgent phrases like “final warranty notice” to convince you to act now and fast. If you’re worried about your car warranty, the FTC recommends checking your owner’s manual or calling the dealer that sold you the car. Never give personal information over the phone to an unverified source, and know the facts about your car.

You’re offered an advance fee loan

You’re offered an advance fee loan

iStock.com/FG Trade

Scammers might entice people with poor credit hoping to stay financially afloat with an advance fee loan. Swindlers might claim their company “doesn’t care about your past,” or that they want to help you “get money fast.” But according to the FTC, any bank or legitimate lenders will be interested in creditworthiness before offering a loan. And if you receive a call from a lender saying you’ve been approved for a loan but you must pay a fee before you receive the dollar amount, it might be a scammer at work.

You’re asked to pay rent before signing a lease

You’re asked to pay rent before signing a lease

iStock.com/fotostorm

Scammers might post listings for places that don’t exist at a low price or with great amenities in hopes of luring in people searching for an affordable place to live. If you’re asked to sign a lease before seeing the rental or to pay a security deposit upfront, the FTC suggests these are signs of a con.

You’re told you’ve won an expense-free vacation

You’re told you’ve won an expense-free vacation

iStock.com/Wavebreakmedia

Who doesn’t want to escape to a remote island or a beautiful white sand beach? Scammers might claim you’ve won a luxury vacation or pretend to be a travel company willing to offer you a dream vacation at a low price. If you’re asked to pay a fee upfront or you’re called out of the blue, the FTC says those are signs of a scam.

You’re selected for a free trial

You’re selected for a free trial

iStock.com/SDI Productions

Free trials are great. Not only do you get to test out a new product, but you get to do it at no cost. However, if you receive a call from a seller who wants to sign you up for a free product, tread lightly. The FTC cautions that the seller might sign you up for one or more products without your knowledge, and payment will be deducted from your account every month until you cancel. To avoid the costs of a “free” trial, research the company, know the terms and conditions of the product and check your billing statement diligently for any unknown charges. Want more tips on how to spot online scams? Check out our guide on how to stop yourself from purchasing fake products on the internet.

More From The Active Times

20 Jobs for Retirees Returning to the Workforce

What To Know About Your Finances and Divorce

Side Jobs That Can Earn You Extra Cash

The Personality Traits of an Entrepreneur 

Small Brands You Didn't Know Are Owned by Big Companies