Becoming familiar with the warning signs of money scams can help you spot trouble before it’s too late. It’s easier to spot a scam if you know what to look for.
Scammers try to gain trust by claiming to be from a well-known business or impersonating a known contact. They may suggest their own verification procedures. They often create a sense of urgency to get you to make decisions without thinking, and they know how to appeal to your emotions to get what they want. If you see any red flags listed below, proceed with extreme caution and do more investigating before you part ways with your money.
Wire Transfer Requests
If somebody you don’t know contacts you and asks you to wire money through a Western Union or MoneyGram company, be careful. There are very few legitimate reasons where wiring money makes sense. Always remember that it is a bad idea to transfer any money to someone you don’t know.
Also, watch out for scammer who may pose as people you know, like your relatives and friends. They may say that they’re having a crisis and need you to wire money immediately. They’ll also usually ask you to send them money without telling anyone else about it. This is a major red flag.
Scammers love wire transfers because the money is available to them almost immediately before anyone knows what they are up to. Furthermore, the senders have very little protection. Once the money leaves your account, it is gone, and you can’t ask the bank to undo the transfer.
Offers to Buy with Alternate Payment Methods
If you’re selling something you’ve advertised online, be cautious of accepting any form of payment other than cash in-person or payment through a secure method. Scammers have many ways to cheat you out of money, even when you are the one supposed to be collecting it.
A common example of this is via a cashier’s check scam. In this situation, a buyer offers to pay you by sending you a cashier’s check, but then they send a check for the wrong amount (typically more than the cost of the item). They will then ask you to go ahead and deposit the check wire you back the difference. A week or so after you wire the money, you find out that the check was fraudulent and that you are responsible for paying it back to the bank if you’ve withdrawn or spent it.
Handling Payments for Someone Else
There is no real reason as to why you would handle payments for someone else. If you’re asked to deposit money into your own account and then wire it to someone else, you should probably turn it down. At best, you’re being set up for a scam. At worst, you are potentially getting yourself involved with something illegal, such as money laundering.
A scammer’s goal is to use your emotions against you to get you to pay. They may tell you that they are in jeopardy of going to jail, losing their job, or that something bad might happen that can only be resolved with financial aid. If you do think someone is in danger, offer them support in ways that are not financial.
A phishing scam is a type of fraud where a user’s personal data, such as passwords and credit card info, is stolen through electronic communication like an email or a text. Scammers can make messages look real but always remember to examine the message thoroughly and look for any spelling or grammatical errors. Phishing scams also usually include a sense of urgency. They will often tell you about an issue and try to get you to act fast. Remember to consider the email or text again carefully. If it is regarding a company that you are doing business with, it is best to call them directly to verify that it isn’t a scam.
Online Shopping Scam
When online shopping, always look for the HTTPS (not HTTP) and the padlock icon in the address bar to ensure there’s a secure connection between you and the website. Online shopping scams often include a countdown clock and a great deal that will go away if you don’t make a decision quickly. Scammers try to pressure you to “act now” or else the deal will go away.
If you see any of these warning signs, it’s best not to engage with the scammer at all. If you have any doubts, then you should get more information. It is better to be on the safe side when it comes to your money.
Remember to be careful if someone:
- you don’t know contacts you
- you’ve never met in person asks for money
- asks you to pay for something or give them money through unusual payment methods
- asks for your personal information, like your bank details or passwords
- pressures you into buying something or making a decision quickly
- offers you something that sounds too good to be true
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