Do you know how to tell if you are being scammed? It doesn’t matter if you are investing money in a multi-level marketing program, applying for a line of credit, or taking the advice of Suze Orman or Dave Ramsey in the investment market; there are tell-tale signs you could be subject to a scam.
Do your internal alarm bells start ringing when someone asks you to pay via wire transfer or Bitcoin? If not, keep reading. You may want to revise some of your personal financial security approach for new threats in the 21st century.
It’s easy to advise people to be on the lookout for high-pressure sales tactics or overly complicated terms and conditions; but what specifically should you be aware of?
The First Warning Sign Of A Scam
The first sign you are being scammed is often that the victim responds to contact from a third party that they personally did not initiate; that combined with the warning signs below can be strong indicators to use caution before proceeding. It’s best not to respond to third-party communication you personally did not initiate when it comes to spending your money.
Purchase Scams: You May Need To Do Some Research
A third party contacts you by phone, email, or postal mail to make an offer, invite you to learn more, or purchase something. Purchase scams can be harder to spot since these often appear to be normal until the very last moment.
The idea here is that the scammer tries to make the victim forget normal caution because of the fear of missing out on a great deal. Instead of checking out a company to see if it is reputable, has good reviews online, and has a general reputation for being dependable? Asking if money refunds are an issue?
Some consumers instead react to what looks like a limited-offer deal and before they know it, they’ve clicked through to order non-existent products or services, or sub-standard knock-offs of legitimate products or services.
There’s more danger in some sectors than in others. According to a Marketplace.org report, the most common purchase scams are conducted online. That report includes a very revealing statistic as quoted via the Better Business Bureau; “80% of the sponsored advertising links that appear in an internet search for pets may be fraudulent”, unquote. Buyer beware!
Beware Of Manufactured Urgency
When a third party tries to pressure you to spend your money, this should be a major warning sign. The common signs of a con using these tactics often involve using an unusual or new-to-you form of payment such as a wire transfer or the use of Bitcoin.
What you need to know is that the scammer is counting on your unfamiliarity with the process of using these alternative payment gateways. Scammers will tell you they cannot accept Paypal or other accepted forms of payment. Instead, they try to route you toward Bitcoin, gift cards, or wire transfers as these are easier to run scams with. Other payment services have closed their security holes or tightened up procedures to help prevent scammers from using them.
Manufactured urgency is a key feature of scams. The con artist wants you NOT thinking, making emotional decisions, and hurrying when you should be slowing down to ask more questions.
10 Things Common To Many Scams
- Promises that sound too good to be true, such as, “We can remove all negative credit information from your credit report!”
- Promises of “instant results” or results faster than should be realistically expected. “We can get your website to the top page ranking in Google in 48 hours!”
- Promises of “secret strategies” designed to bring “guaranteed results”.
- The phrase, “Guaranteed results” should be viewed with caution.
- Promises that the company you aren’t familiar with has a “special relationship” with an established, legitimate entity.
- Payment upfront required for services the law says must be rendered first before payment is made.
- Unusual payment requirements, changing payment requirements, odd payment gateways.
- Poorly spelled, badly written, confusing, or unclear material (e-mails, flyers, contracts, etc.) supposedly from a U.S. company.
- Calls regarding your transaction from “Unknown Number” or “Number Not Available” or other suspicious indicators.
- Requests to have payment made via wire transfer, gift cards, or Bitcoin.
Joe Wallace specializes in personal finance, military affairs, and consumer protection topics. Since 1995, his work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and collects unusual vinyl records, which gives him an excuse to write the vinyl blog Turntabling.net.