Scam Alert! Ten Signs to Avoid

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Imagine if you had little or no ethics or morality at all. You live under the belief that if you lie and misrepresent right to a person’s face and they believe it, they deserve to have their money taken from them for being so stupid.

There are a lot of people out there that fall into this category. Rather than treating people fairly, they’re much more interested in doing whatever they can to convince you to give them something for next to nothing.

Of course, if you’re the one to fall into this kind of trap, you pay with your money, your property, and sometimes your identity.

Thankfully, there are usually big red flags for many common types of scams. Here are ten of the most common ones. I’ve built this list over the past few years while reading up on how various scams and unethical arrangements operate.

Unsolicited emails If someone sends you an email out of the blue with a business arrangement or a request for money or a request for business, ignore it. Delete it immediately. The only emails you should ever spend a second of your time looking at are personal communications and contacts from businesses you’ve already established a relationship with. Everything else should go right in the trash.

Unsolicited phone calls Similarly, if an individual or business calls you with any sort of financial transaction proposal or arrangement of any kind, ask to be removed from their call list and then hang up the phone. The risks of such unsolicited contact are far greater than the potential rewards.

Unsolicited mail Yep, junk mail. Trash all of it. Tear it up and throw it straight in the trash can. If you do happen to see an offer that interests you, research it on your own and find a legitimate way of going about it rather than following the instructions on an unsolicited mailing.

Tip #1: To sum up these last three points, don’t spend even a second of your time on unsolicited communications from any individual or business that is offering any sort of sales arrangement. If you want to purchase any sort of product or service, find the business yourself and establish contact yourself. This way, you can verify at least to some extent that the organization is a legitimate one before there is any contact between the two of you.

Pressure tactics If anyone attempts to trigger your emotions – guilt, anger, stress, anything at all like that – in order to make a sale, walk away. No “bargain” is worth that level of undue stress. Start your shopping over again and find an organization to do business with that is confident enough in their product to not have to engage you in uncomfortable practices just to make a sale.

Requests for personal information The only time a business should ever ask you for personal information is when you initiate contact with them and set up your account with them for the first time. After that, there should be no requests for personal information, period. If a business contacts you and claims to need your information, never give it to them. If it’s a business you’re already working with, contact that business yourself and make sure that the request legitimately came from them.

Refusal to provide documentation If you’ve worked out an arrangement with a business but they refuse to provide documentation for that arrangement, back out. Do not give them a dime. Do not give them any of your personal information. Any legitimate organization will provide you with all of the documentation you request with regards to the arrangement you’re entering into with them.

Refusal to provide contact information If someone contacts you for any sort of exchange of goods and services but refuses to provide verifiable contact information, walk away. The only reason a business won’t provide you contact information is if they don’t want pesky customers contacting them after they’ve taken the customer’s money. You don’t want to be that customer.

Refusal to accept trackable forms of payment If a business will only accept cash as a form of payment, walk away. It’s fine for them to accept a multitude of payment types, but if they’re refusing to take a trackable form of payment from you (a carbon-copied check, a credit card, etc.), then they don’t want you to be able to provide any sort of proof of the transaction, and that’s never a good thing.

Refusal to provide credentials or proof of their statements Again, if a business makes a claim but won’t provide any sort of proof of their claim or any type of references, close the door and walk away. This is something you should always ask for when people are providing services. Ask for licenses. Ask for references. If they can’t or won’t provide them, use a different service.

Tip #2: Simply put, if you make a reasonable information request of a business that you’re considering doing business with and they refuse, walk away. Any legitimate business will provide you with whatever documentation you request, within reason. The things mentioned above are all within reason.

Promises of extremely simple ways to earn or win money Let’s get this straight right now. You can’t sit down at home and immediately start earning thousands of dollars (not without a lot of luck or someone helping you tremendously). You can’t get a bunch of money for a little amount of money with any guarantee. These things simply don’t work – they don’t make basic economic sense. If you’re offered anything that seems to offer an incredibly easy way to add money to your pocket, just walk away. The slight chance that it is legitimate is not worth the losses you’ll incur from the overwhelming chance that it’s just another scam.

In short, walk away from anything in your life that doesn’t pass your smell test. If anything seems off at all for any reason, walk away. Trust me, you can always find a more legitimate arrangement later on without the headaches of being involved with a con artist.

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30 thoughts on “Scam Alert! Ten Signs to Avoid

  1. What about pressure from your peers or the government to invest in sponsored plans etc. I think there is a lot of bad pressure out there to do things with the crowd that are just plain bad ideas.

    The worst kind of pressure is the pressure of so called experts and overall popular ideas that are going to hurt you in the future because you didn’t take time to look into your options.

  2. I have a terrible time with unsolicited mail…not for myself, but for my 96yo mother. She gets so many pieces of mail asking for donations for both charity and political organizations. I keep telling her not to send money, but sometimes she does it anyway. I also send back any paid return envelopes with “please remove from mailing list” but it doesn’t always work. I have investigated some of the charities and told her of the ones where most of the money goes to solicitation of donations. I wish she would let me screen her mail, but she’s not ready for that…yet.

  3. I post back whatever unsolicited mail I get in the envelope they send with it. That way, they pay to receive their spam.

  4. You say the only time a business should ask for your personal information is the first time you contact them & set up an account, however this is not the case. I work at a financial institution and one of the ways we verify telephone requests for information is to ask questions concerning personal information that the customer has given us. If the person cannot correctly verify information, then we will not release information over the phone.

  5. @Teresa: I think Trent means requests from the company itself – so when they call you or send an email to ask. The risk being that the request is not actually coming from the company, but from someone else. When you call the company yourself, you can be fairly sure who you’re dealing with.

  6. These are good suggestions but they omit one major source of scam danger, and that is family and friends. Skilled con artists are more than willing to scam their own family and friends, or get their current victims to embroil some of the victim’s family and friends.

    These scams can be for sizable amounts of money, usually for loans or unique “investment” opportunities that are “guaranteed” to generate extraordinary returns. Even sophisticated investors get hoodwinked by the charm and self-confidence of such con artists (Bernie Madoff springs to mind but one of the most fascinating was the Foundation for New Era philanthropy scam that sucked in churches and universities and even a former U.S. Treasury Secretary), but there are thousands of ordinary people who get taken every year.

    How to recognize a con of this type:

    1. If it’s an investment, the business plan might have, at its core, some level of deceptiveness or dishonesty. Con artists know that some people are attracted by the idea of “taking advantage” of or “getting even” with someone – a business or industry they despise, a group they have contempt for, the government, etc. Such people are to con artists what honey is to a bear, with the added advantage that they may be too embarrassed to pursue legal remedies.

    2. Conversely, the con may rely on the kindness and compassion of the victim or their religious or ethnic loyalties, with a heart-rending sob story that can’t be reliably checked out, an appeal to generosity and a great show of offense and hurt at the first expression of a desire to investigate or question anything about the story. The New Era scam played on the desire of wealthy donors and the charities they donated to, to have their gifts “matched” by secret “anonymous donors.”

    3. Or the con may appeal strictly to greed and sense of entitlement, promising huge returns through means that are unexplained or are too confusing to be understood by the victim, with the underlying theme that the victim “deserves” to make a killing and will prove his/her intelligence, courage, sophistication or whatever, by making the investment and “showing” all those who doubted the victim’s financial smarts.

    4. The offer is shrouded in secrecy and urgency. “No, there’s no time for your lawyer to look this over and anyway, he’ll just try to horn in on the deal.” “Look, the paperwork is on its way but if you don’t get in now, by the time it gets here they’ll have filled all our slots and you’ll lose out.”

    5. The called-for investment is disproportionate to the victim’s means. A low-wage person with $10,000 total in savings, who’s urged to invest half of it in a sure-fire penny stock or business start-up is most likely being conned, and also being set up to lose the rest of his/her savings when the “investment hits a snag and needs just a little more capital than expected, but the pay-off will be even bigger than expected, too.” The con knows that a victim who’s already invested a major part of his/her wealth will be very reluctant to cut losses and walk away, and is likely to keep throwing good money after bad.

    Basically, con artists work on people’s emotions and use them to cloud people’s reasoning and judgment. That’s why friends and family of the con artist or friends and family of the early victims are the best targets to become future victims, since the con artist has inside knowledge about what emotional appeals will work best, and can make the transaction seem more or all about the relationship rather than about the money.

    Think of a lot of the people whose mortgage brokers put them into adjustable-rate loans at 100% or 110% of equity, with high mortgage commissions, on “liar Loan” applications that the broker AND the borrower knew were lies. The broker was playing on the borrower’s 1) desire to take advantage of those nasty banks and belief that the banks deserved to be lied to, 2) sense of entitlement to a home well beyond their true means, 3) gratification at being smart enough to pull it off, 4) sense of urgency about keeping their interest rate lock and buying before house prices got even higher, 5) sometimes, desire to gratify his/her family, and 6) a personal bond often developed with the mortgage broker who encouraged all of those feelings. (No, I’m not saying everyone who bought a house and got wiped out in the bubble was conned, but on the liar loans that were done with the broker’s connivance, I’d say there was some con artistry going on.)

  7. I’m job searching right now, and I’ve lost count of the number of times a job ad has turned out to be a scam. It’s always emails asking for you to go to x site to get a credit report, with the promise of an interview if only you do it.

  8. Also, emails that appear to be from a legitimate company, individual or organization but the wording is slightly off (the name is not quite a perfect match, mispelled words/poor grammar) if not bizarre (as if poorly translated from another language). One of the recent scams is an email that appears to be from a friend or family member purporting to be needing money wired to them while on vacation out of the country (this one is listed on Snopes).

  9. Ignore ALL unsolicited emails???

    This seems a bit broad brush to me Trent. I published an ebook last year where I had to send unsolicited emails to bloggers. The bloggers that responded got to be part of a really cool project.

    You’ve NEVER received an opportunity from an unsolicited source that was legitimate and not a scam?

    I have a very hard time believing that.

  10. Agreed, Nick. As a freelancer I get my share of unsolicited e-mail, and they are legit gig offers from potential clients. And, of course, promoting myself sometimes means sending unsolicited e-mails!

    Yeah, I also have a problem with those “absolute” truths.

  11. I disagree about a place not accepting checks. I work for a non profit physician’s office and we won’t accept them. It simply takes too much time to track down folks who bounce checks. You’ll never find some of them again and you will lose your money. Cash and credit/debit cards only.

    Pressure tactics unfortunately have worked on me. I was told a sob story on the street and felt badly so I gave the woman some money. When I thought about it later, there was no way her story could have been true and I felt like a sucker.

  12. Let’s not forget the Nigerian Bank Scam used in so many different ways. You offer something for sale or rent on Craigslist, and someone writes wanting to buy or rent your “item.” First tip off is they don’t bother to mention the exact name of item. Second tip off is they will be “travleling” and send you check for amount. They “accidently” send you check for too much money, silly mistake, my assistant goofed, please send back check for the difference, or wire it Western Union. Similar with the “I’m traveling and lost my wallet, please wire $2,000. so I can get home scam”. Mostly these are run by Nigerians, but others occasionally copy them. All scams. They must work on a lot of people.

  13. Refusal to accept trackable forms of payment.

    Though this is a very good point for online interactions, I think it works the other way when selling things online that will be picked up in person. I’ve had scammers offering to buy the ‘item’ and send me a cheque, which, as Craigslist says, would initially go into my account and then bounce 20 days later and which the bank would then take back from me (really I think this should be the banks problem, not ‘mine’).
    In these cases I think the only safe form of payment is cash on pickup.

    Re unsolicited freelance opportunities. I assume the unsolicited e-mail in this case is almost certainly an e-mail giving an outline and encouraging people to get in touch to learn more. It is not a business deal in itself. I think the main point is good.

  14. Re con artists, David W. Maurer wrote a fascinating book ‘The Big Con, The story of the confidence Man and the confidence trick’ which I highly recommend

    Here intelligence will not protect you as the con men are so convincing. This relates to the idea ‘an honest person cannot be conned’ (an idea which Terry Pratchett disparages in his con man book, but I think he misses the point).

    Basically in the 20s people didn’t expect that a legitimate deal would get them some huge gains. The idea was that you exploited a loophole to get an unfair advantage that other people lacked the technology or daring to carry out. Any person who had said: ‘look this sounds great, but it’s not entirely honest so I’m going to have to leave this deal on the table’, would have been safe (unfortunately after the con mad got done explaining that was about 0.01% of humanity).

    As Trent said above, sometimes con men think you deserve to be conned. I read an account by a con artist who would set up the mark by having someone drop a wallet which contained the fake opportunity. If the person was honest enough to return the wallet the con wouldn’t work. If the Mark let themselves be convinced by the con artist that they should just have a quick look inside, then the con artist considered that a total moral blank cheque and that the Mark now ‘deserved’ to be conned.

    Slightly off topic, but it’s such a fascinating subject.

  15. @Amanda – I agree that “no checks” is a reasonable policy. But “cash only” is different, and and established business shouldn’t accept only cash. Under any circumstances, you shouldn’t give cash unless you’re getting what you wanted right there and then. Spending cash on “investment opportunities” is a terrible idea, and if they’re asking you for cash then you can be pretty sure it’s a scam.

  16. Don’t forget unsolicited offers at your door. Selling a magazine subscription to raise money for a year abroad? Magazines go to military people? “Most people” are giving this much? Ummm… Let me do some research on this organization and you can get back to me.

  17. #12 – that is so true. My co-worker almost fell for that scam. She was sent a certified check and of course we believed the story of his assistant sending too much money and it was an official looking check. Thankfully she went to the bank to have then look it over – it took some time but they found that it was a fraud. She only did it because the amount was way off – it only $100 or less she wouldn’t have questioned it.

  18. I’m not completely sure if it was a scam, but it was close. I got a call from a man selling something that sounded really great to me, if it were true. There was a 50% off sale. I asked if they had any paperwork I could read about this product, as it sounded so good. But, he said, I would lose the 50% off sale. I said it didn’t matter. If it were what he described, I would pay full price for it. This went on for about 5 minutes. I’m good at talking a lot. At the end on the 5 minutes, he hung up on me.

    I often hang up on sales people, but this is the first time one ever hung up on me. I did a happy dance. It must not have been good stuff because he missed out on a sure sale at the full price. Wow!!!

  19. Oh – I remember another one. I was working at a local S&L and the government spent a lot of money advertising that you should never give out your personal information over the phone or internet. Several people called in orders to stores and would refuse to give their account number.

    The government had to spend some more money to advertise that if YOU called the company (i.e. Sears, your bank, etc.) it was ok and actually necessary to give your information.

  20. @Solomon – haha that’s awesome.

    I don’t give solicitors the time of day – sorry, I know they need to make a living, but I don’t care. I hang up abruptly when they call (if they call). I’ve got a spam filter in my Gmail that works pretty well. And snail mail, I just tear it up. I used to sort mail at a dorm a few years back, and I was told that 99.9% of anything “Presorted Standard” was junk mail, and that if the name didn’t match the mailbox, we were allowed to toss them. Sure enough I check my mail at home and it’s true.

    By the way Trent, I was able to check out your book at my town’s public library – very excited to read it. :)

  21. I got scammed about a month ago-and fortunately it was only a $25 donation. It was to the Police Protective fund. He answered every question I had (like what percentage of funds go directly to the fallen police officers’ familes, etc.) and was extremely professional. It was only after a fireman’s charity called and I said I’d already given for the quarter to the PPF and he said, “We’re they involved in a scam?” I did my research, and although not totally a scam, they did not represent themselves honestly at all. A tiny percentage of the donations actually make it to the families.

    I felt like a giant fool and thought I was too smart not to be scammed. I will always be diligent about research before donating again.

  22. I work at a bank, and the most common scams I see are:

    Lottery–No, you unfortunately did not win a bazillion dollars in the Australian/Canadian/Wherever global lottery. Not only did you not buy a ticket in the first place, as a US citizen, it is actually illegal to play.

    Car Sales–like #12 commented above, the ‘buyer’ sends too much money and the extra is to be used for ‘shipping’ the automobile to wherever. Even calling the bank to verify funds on these checks doesn’t always work, since the checks are often stolen from legitimate businesses, and often do have funds available. But that doesn’t mean the check will be honored, and you will be left holding the bag.

    Secret Shopping–for your first assignment, cash this check and do a wire transfer to xxxxxx; then surprise! You owe the bank $3000!

    Unfortunately, desperation often outweighs people’s common sense in these situations. Ask your banker if you are in a situation you are unsure about…they’ve most likely seen it before.

  23. @ #13 ChrisD–

    How is it the bank’s fault that YOU presented the bank with a bad check? You got credit on your account using funds that turned out to be no good, so the bank has every right to pull that money back out of your account. As the endorser of the check, you take responsibility for the check going into your account. Hopefully the banker was smart enough to put a hold on the check so you couldn’t use the money until the check actually cleared, in which case no harm would be done to either party. Don’t deliver merchandise you sell until you KNOW the check has cleared!!!

  24. My 20 YO daughter just go caught in an employment scam. Unfortunatley, before I found out the details, she had sent ALL her personal information by email. She had researched the company on line – they had a website, a name SIMILAR to a legitimate defense contractor – I even found a Dun & Bradstreet number! The “job” involves receiving packages, and reshipping them at a ridiculously high rate of pay, plus a bonus for each package. I had to dig a bit on the internet to find similar scams, under different company names. We now have contacted FedEx and UPS to pick up these packages and report the fraud. THERE ARE NO LEGITIMATE WORK AT HOME JOBS RANDOMLY AVAILABLE!!!

  25. By the way, she found this job on Career Builder. She contacted them, not the other way around. She is now at risk for having her identity stolen…

  26. #24 Gayle: THERE ARE NO LEGITIMATE WORK AT HOME JOBS RANDOMLY AVAILABLE!!!

    I have a friend from high school who started his own business and he offered (perhaps still offers) legitimage work-at-home jobs. A year ago his company had about 40 part-time work-at-home people on the payroll, all over the country (because of the nature of the work, he needed to span all time zones). Their business has grown a lot since then, though, so either he has a lot more than 40 now, or (judging by his website) he’s moved everything into a 2-shift call center.

    In short, there ARE legitimate work-at-home opportunities, but they’re nearly impossible to sift from all the scams.

  27. #13 ChrisD–

    How is it the bank’s fault that YOU presented the bank with a bad check? You got credit on your account using funds that turned out to be no good, so the bank has every right to pull that money back out of your account.

    The bank takes the money from the payers account and then takes three days to pay the money into your account. Ostensibly they are checking if the cheque is valid but coincidentally they get to keep your money interest free for three days, given all the transfers that adds up to a lot of money.

    If the bank decides the cheque is valid and gives you the money, it should not then turn round and then say oops we made a mistake. Also if they take the money back without warning you and make you overdrawn and make your own cheques bounce, they will charge you a fortune for that. All this trouble would be avoided if they checked the cheques properly in the first place or at least took some responsibility for their mistake and gave you time to pay the money back.

    On a slightly related topic cracked did a very funny story about someone actually cashing a fake cheque. But don’t worry, they gave the money back in the end, see the 6 most creative abuses of loopholes.

  28. I think it might be helpful to acknowledge the difference between unsolicited MASS email (spam), calls, etc. and those very few personal contacts that might come about through legitimate (though unsolicited) channels. For instance, I was contacted via email by a reputable publisher a few years ago. Seems they liked some of the photos on my blog and wanted to include one or more in a book on a specialized interest that I used to blog about. I was pretty happy to be able to say that I was a “paid, published photographer” – so they got a good deal on using one of my photos (of which I still retain ownership).

  29. Like Solomon (#3), I also return junk mail in the postage-paid envelope that comes with it. However, I also include a note that I’ve printed on neon labels. It says something like, “I do not accept unsoliticted mail. Please remove me from your mailing list and do not sell or give my information to anyone else.” I stick the label somewhere near my contact information (which they’ve usually pre-printed on their application or donation form; otherwise I return the envelope they mailed to me) without covering the information up. This has cut way down on the junk mail I get.

  30. Lately with ‘Nigerian’ scammers’ e-mails [I get several a week], if they say they have anywhere from 100,000 or so up to 3,000,000 and want to give it to me, I tell them that I’m not interested in a sum of money that small.

    If they want me to do something that smacks of fraud or illegality [as many of them do], I tell them the IRS will get me if I do anything with them! and that they shouldn’t contact me again because the IRS has agents everywhere! and they monitor all my communications! OMG! ; )

    Seems to have cut down the amount of these e-mails I get…

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