most common money scams

Unfortunately, we live in a world where there are more money scams than ever before. It is a constant game of cat and mouse, consumers trying to be aware of what is happening, and scammers trying to figure out a con to get around them. According to AARP, more than 1.9 billion dollars was lost due to fraudulent activity in 2019 alone. It is more important than ever before to protect yourself from the most common money scams.

Banking Scams

Some of the most popular money scams are banking related scams. These can include a variety of scams including but not limited to, overpayment scams, unsolicited check fraud, automatic withdrawals and phishing scams. The goal of these scams is to either get your banking information or get money out of your bank account.

Overpayment Scam

The way the overpayment scam works is by sending a check for either payment of good or services more than the agreed upon amount. The payer than asks the payee to deposit the check and either wire or send back the extra money in another form. The reason this is generally fraud is because the check will generally bounce after a few days, leaving your account depleted and if you already sent money out then the bank will hold you liable.

How to Protect Yourself

Anytime you are getting funds from someone for the first time, verify that the amount is correct. If the amount differs ask the payer to send you a new payment for the correct amount. If for any reason you feel like a payment is suspicious or potentially counterfeit, try talking to a representative at the bank. They deal with more instances of this type of fraud and can usually identify it quicker.

Unsolicited Check Scam

The unsolicited check scam works by sending you a check in the mail that you weren’t anticipating. If you deposit or cash this check, it is an agreement to sign up for some sort of subscription that has difficult cancellation policies. These scams often include a “free trial period” in which you may even forget about the check in question.

How to Protect Yourself

If you receive a check that you aren’t expecting, read everything that came with the check. A good rule of thumb is do not deposit or cash checks that aren’t for something you weren’t expecting. When in doubt, google the company that the check is drawn on and see if you can find anything about them online.

Phishing Scams

Phishing scams are the most common money scams I saw during my career in retail banking. These scams work by trying to get you to enter your banking or personal information onto a website while posing as someone else. These include subsets of phishing scams such as social engineering scams and ATM skimming devices. With the prevalence of online shopping and banking, these scams are getting more and more popular.

How to Protect Yourself

Always make sure that the website you are on is the website you intended to use. I always go directly to my banks website when logging into my online banking. Also be sure to avoid entering sensitive information while on public Wi-Fi. Many browsers now feature security features to try and help consumers but these protections are not fail-proof. Also be sure to inspect anywhere that you are putting your debit card or credit card to protect your information.

Pyramid Scheme

I have very strong feelings about multi-level marketing and pyramid schemes. I have seen several friends fall victim to these scams. They tend to give you the promise of ‘owning your own business’ and ‘work from home’ which is something that everyone is looking for given the current pandemic. These companies rely on people bringing in new recruits under them and buying supplies to sell to their friends to create revenue. Eventually these companies fail because they are not able to bring in enough new recruits to sustain themselves. There are companies that utilize elements of a pyramid scheme but aren’t entirely a scam. Such companies include Tupperware, Avon and Pampered Chef. I don’t fault anyone that it works for, I just personally believe that these companies need to be a little more forthcoming with expectations of success.

How to Protect Yourself

Make sure you do your research and know what you are getting into. If you are being encouraged to get your friends to join you in your endevours, it is most likely a pyramid scheme. There are plenty of ways to make monthly income that don’t involve signing your friends up for your company. When in doubt, google the company in question and make an informed decision based off of what you find.

Lottery Scams

Lottery scams work by saying that you won a prize but have to pay a certain fee to collect the winnings. It can be easy to get caught up in the excitement of a sudden windfall. Before you send off the $100 to collect your prize, think back to whether you even played this particular lottery. If there is a fee to collect the prize, why would they not just deduct it from your winnings? These scams tend to impersonate foreign lotteries or the publisher’s clearing house so it is important to read everything thoroughly.

How to Protect Yourself

If you haven’t played a particular lottery, you probably haven’t won. It is important to read any mail you receive to look for information in these situations. If it is a phone call, ask for everything to be sent in writing so you can take the time to understand what is going on. These scams tend to target the elderly, because they are more vulnerable and more likely to send money away without thinking about it.

Most Common Money Scams

This is just a brief introduction into the most common money scams. Odds are you or someone you know have either been a victim or attempted victim of one of these scams. At the rate that these fraudsters are collecting payouts, it doesn’t look like there is any sign of stopping. If you have any questions, get the police involved as they will be more than happy to help someone keep their hard earned money.

Do you have any personal experience with one of these money scams? Share it in the comments below!

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