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The online world is a dangerous place where your money is concerned. There are all sorts of people out there looking to take advantage of you and get their hands on your hard earned cash. A lot of the traditional scams have been adapted and improved by scammers to keep up with increased awareness of their methods.
People often think that it’s only naive or vulnerable people that get caught out but the truth is, even the most financially savvy people can fall prey to these fraudsters. They’re professional criminals that know exactly what to do and say to get hold of your money.
The key to protecting yourself is knowing what the most common scams are and how to spot the tell-tale signs. It’s also important to remember that, although a lot of them have moved online, you still need to watch out for those good old fashioned scams that have been going for years. To make sure that you don’t get caught out in the future, here are some of the most common scams and how you can avoid them.
Timeshares aren’t a scam in the sense that anything illegal is going on, but they’re an investment opportunity that people are often duped into, and it isn’t a favorable one. The way that a timeshare works is that you pay an upfront cost and then a yearly maintenance fee which gives you a share in a vacation home. You get given a time slot, usually one week out of the year, when you’re able to use the place.
The thing is, you’re paying maintenance all year round, for one week of use. That works out way more expensive than just booking somewhere for a week away. You’re also limited to one week unless you swap with somebody else. In more recent years, the companies running the timeshares have started using a points system instead of a week by week allocation. If you don’t use the points on a vacation then you can spend them in certain stores or on air miles. The thing is, the points aren’t worth anywhere near as much as the cash value you’re paying for them.
If anybody offers you a timeshare, don’t even entertain them. The problem is, these investments have been around for a while and a lot of people entered into contracts before they realized that it wasn’t a good deal. Those contracts are also notoriously hard to get out of so you get stuck paying out every year. Luckily, there is a way out. A company called Aconsumercredit founded the timeshare contract cancellation method to help people get out of it. They’ll deal with the timeshare company to either amend the contract and make it fairer or cancel it completely. If you got duped by a timeshare, get in touch with them right away.
Most people are aware of the classic “Nigerian Prince” email scam that was going around in the early days of the internet. If you haven’t, it went something like this; you would receive an email from a supposed Nigerian prince who claimed to have millions of dollars that he wanted to transfer to you, all you need to do is send him all of your bank details. Most people can see right through that now but there are still a lot of email scams that are a bit trickier.
You might get a very official looking email, claiming to be from the tax man. It will say that you’re eligible for a big tax refund, again, you just need to put your bank details in. More people fall for this because it looks the part and it comes from what they think is a reliable place. As a general rule, never give out your bank details over email and if you’re unsure, call up the tax people and ask if you’re due any money.
Another common email is the fake invoice; they usually claim to come from Google or Apple, saying that you’ve made a purchase on the app store and the invoice is attached. Now, if you haven’t bought anything, you’ll be curious about why they’ve taken money and click on the link to see the details. The link will then download malware to your computer which criminals can use to do all sorts, including getting into your online banking. Before you click any links on an email, scan it with anti-virus software to make sure it’s safe.
Another common way that fraudsters try to lure you in is by promising investment opportunities that sound too good to be true, and it’s usually because they are. If they’re just calling you up, it’s easy for you to say no and hang up. Fraudsters will get around this by calling you and telling you that you’ve been specially selected and invite you to a free lunch.
When you’re there, they’ll give you a nice meal and start outlining this amazing investment opportunity. The thinking behind it is, people feel that they owe something to the fraudsters so they’re more likely to agree to the deal and hand money over. If you want to invest your money, go and seek out the opportunities yourself. If somebody calls you up offering you the deal of a lifetime, it’s likely to be a scam.
Investing in penny stocks is a great opportunity, especially for people that are new to the stock market. Companies that trade at a very low stock price, usually less than $1 (hence the name) are an easy way to make small investments and if the price shoots up, you can make a lot of money out of it.
However, they’re also a big target for fraudsters. They’ll go to forums and start posting about these companies that are going to be the next big thing, then advise people that they need to get in now while the stocks are still cheap. If you do that, they say, you’ll make a massive profit when the stocks shoot up. The thing is, it never happens and you’ll lose all of that money. If you’re thinking about investing in stocks, it’s always best to speak with a professional broker that knows what they’re doing.
These are just 4 of the scams that are out there, and they’re changing their methods all the time so you have to be vigilant. If something seems too good to be true, it probably is.