How To Avoid Getting Scammed
SCAMS: SPECIAL INVESTIGATION SERIES
By Dean Philips
Monday, November 22, 2004; 7:40pm EST
Listed below are some of the most popular and common scams:
1. Nigerian Letter Scam:
This one's been around for many years but continues to flourish.
Many of these e-mails claim to be from a person in Africa, usually
Nigeria. The writer claims to have access to millions of dollars,
either from a relative or from knowledge of an idle account. A
percentage of this money is promised to the victim if they will
allow the money to be processed through their personal bank account.
The victim is instructed to keep their share and send the remaining
money to the scammer.
The check given to the victims is fraudulent. The victim is then
liable to the bank for the check they wrote to the scammer.
Here's what will happen when you give strangers your bank account
information: They will take your money. Period.
2. Phishing Scams:
"Phishing" is a high-tech scam that uses spam or pop-
up messages to deceive you into disclosing your credit card
numbers, bank account information, Social Security number,
passwords, or other sensitive information.
Phishers send an e-mail or pop-up message that claims to be
from a business or organization that you deal with--for
example, your Internet service provider (ISP), bank, online
payment service, or even a government agency. The message
usually says that you need to "update" or "validate" your
Recent phishing victims include Yahoo, Citibank, eBay, Best
Buy and Bank of America among others.
If you get spam that is phishing for information, forward it to
3. Chain Letters:
In this classic scam, you're asked to send a small amount of money
(usually $5.00) to each of several names on a list, and then forward
the letter including your name at the top of the list, via bulk
e-mail. Many of these letters claim to be legal. They even include a
section of the U.S. Postal Code on illegal schemes. Don't be fooled.
They are not legal. And if you participate, not only will you be
breaking the law, you'll lose your money as well.
4. Work-At-Home And Business Opportunity Scams:
These scams tempt victims with ads stating "no experience
necessary," promise high earnings and claim to have inside
information. The scammers usually require victims to pay anywhere
from $35 to several hundred dollars or more for information, kits or
materials that do not provide the promised results.
Frequently, these schemes involve making handicrafts, stuffing
envelopes, medical billing, or state, "Use your home PC to make
money fast in your spare time!"
In the craft making or envelope stuffing scam, after paying fees and
completing the assembly of the products, victims are told their work
is low quality and unworthy of compensation.
Medical billing scams require victims to purchase supplies and lists
of doctors who, inevitably don't exist or are not interested in the
5. Bulk E-mail Scams:
These solicitations offer to sell you bulk e-mail addresses (spam
software) or services to send spam on your behalf. Example: "Reach
100 million websites, $39.95"! The software is usually of poor
quality. It's spam and a scam. Don't do it.
6. Auction and retail scams:
These schemes typically offer high-value items, such as Cartier
watches, Beanie Babies and computers, in hopes of attracting many
consumers. What happens is the victim wins the bid, sends the money
and receives nothing or receives products of much lower quality than
7. Guaranteed Loans or Credit Scams:
This scam comes in a variety of flavors: home equity loans that
don't require equity in your home, personal loans regardless of
credit history, etc. After you pay the application fees, you receive
a letter saying that your loan request was denied. Usually, you
never here from these companies again.
8. Credit Repair Scams:
These scams promise to erase accurate, negative information from
your credit file so that you can qualify for loans, mortgages,
unsecured credit cards, etc. It doesn't work. Not only that. If you
follow their advice and lie on loan or credit applications,
misrepresent your social security number, or get an Employer
Identification Number from the Internal Revenue Service under false
pretenses, you will be committing fraud and violating federal laws.
Another variation of this scam is the promise of a brand new credit
file. Don't do it.
9. Vacation, Sweepstakes And Prize Award Scams:
In these scams you receive notification congratulating you because
you've won a fabulous vacation, a car or some other prize award. All
you have to do to collect your prize is pay a small fee (usually
several hundred dollars). In return, what you end up getting is a
toy car, (I kid you not) or a vacation certificate to the Bahamas or
some other exotic vacation spot. It's really a lousy deal. You have
to pay for your own airfare, and the accommodations that they
arrange are usually in rundown hotels. Let the buyer beware!
10. Employment Scams:
Employment scammers take advantage of job seekers. They claim to
offer employment services, inside information or inside contacts to
jobs. After paying a fee, victims learn they only provide advice,
help writing a resume--or less. Some fraudulent employment services
simply sell lists of companies that they have gotten from public
directories. They usually have not contacted those companies
directly or know if there really are any job openings.
11. Multi-level Marketing (MLM) or Network Marketing Scams:
I know I'm going to ruffle a few feathers with this one, so let me
just say right now that all MLM or network marketing companies are
not scams. Obviously, there are some good, reputable companies out
there. However, there are so many bad ones that I'm compelled to
include the entire industry on this list. Before getting involved
with any MLM or network marketing company, investigate, investigate
and then investigate some more. Don't get caught up in the hype. And
here's a fact no MLM or network marketing company will ever tell
you--not even the legitimate ones: Unless you have outstanding sales
ability and/or people skills, it is extremely difficult to make any
money in MLM or network marketing.
Here are some other things you should watch out for: Make sure the
website you're visiting contains all three of the following:
1. A real persons name (not just a company or business name)
2. A telephone number
3. A street address (not just a P.O. Box)
If all three of the above are not present, walk away from the offer.
Before purchasing anything, you should always check first to see if
the company has had any complaints lodged against it. The following
websites publish complaints and/or scams:
If you do get scammed, report it to the aforementioned websites
immediately. You probably won't be able to recover your money. Few
people ever do. But at least by reporting the crime and making it
public record, you make it harder for that company to scam anyone
In closing, always carefully investigate any business opportunity,
and remember: If it sounds too good to be true, it probably is!
About the Author
Dean Phillips is an Internet marketing expert, writer,
publisher and entrepreneur. Questions? Comments? Dean can be
reached at mailto: