Monday, August 9, 2010

Don't Be a Victim of Fraud

Fraud comes in many forms--telemarketing, mail scams, bunco schemes. If you're approached with a deal that's “too good to be true,” it probably is. If "you've gotta move on it now," you'd better take your time. Watch your step if you're approached by one of these "get rich quick" schemes:

The Bank Examiner A phony bank examiner, IRS agent, or policeman contacts you and asks your help in catching a dishonest employee. You're asked to withdraw funds from your account and give it to the "examiner" so serial numbers can be checked. Of course, the money vanishes, along with the "examiners." Banks, IRS, or the police never use this procedure.

The Pigeon Drop In this bunco scheme the victim is approached by someone saying they have found a large sum of money and will share it. The swindlers ask that you withdraw "good faith" money from your account. They take your "good faith" money and then make phony arrangements where you can pick up your share of the found money. It’s hard to believe so many people fall for this one, but it happens.

Telemarketing Fraud Many types of fraudulent businesses are promoted by telephone, such as travel scams, prizes offered by postcard whereby the victim is asked to call 900 number at a high fee, magazine promoters, charity solicitations. Not all telemarketing is fraudulent, but it's a good idea to ask the company for their offer in writing.

Pyramid Schemes An illegal pyramid scheme requires that you make an initial investment to become a member. Then you must recruit others into the investment who also pay a fee. For each person you bring into the program, you either receive money or bonuses. In an illegal pyramid scheme, making money depends not on how much merchandise is sold, but how many people you bring into the business.

Phony Repairs Auto, roof, and plumbing repairs account for many swindles. Sometimes the victim is charged an outrageous price for work done; sometimes no work was done at all but the victim has signed a "contract" and the swindlers claim money is owed. Or, the contractor may say he needs much of the money up front so that he can buy materials and that’s the last the buyer sees of him. Always get a written estimate before work begins. If you are unsure about the company, call your local Better Business Bureau. It’s also a good idea to ask for local references. Better yet, ask your friends if they know of a reputable repair company.

Work-at-Home schemes These endeavors rarely make money as claimed. By the time the victim has bought the kit or required supplies, the market for the finished product has disappeared and the company won't buy back the supplies.

Here are tips to avoid being a victim of fraud:
1) Be leery of "get rich quick" schemes. The quicker you say “yes,” the quicker the perpetrator gets rich.
2) Don't be pressured into making hasty decisions for offers made for "a limited time."
3) Never give your credit card or bank account information over the telephone to anyone other than a reputable company.
4) Beware of free prizes that require you to pay tax, shipping charges, or handling costs. Refuse a prize if you have to make a purchase to claim it.

No comments: