You're smart, you're financially savvy, and you'd never fall for one of those get-rich schemes. But that doesn't mean you won't get scammed. It's easy to assume that only the truly gullible are prey for con artists and scammers, but that's not always the case. Take a look at these seven popular scams and learn how to protect yourself — and your wallet.
1. ATM skimming
This type of crime has been around for decades, and as technology has improved, so have ways to duplicate ATM cards. Here's one way it works: Criminals attach a device on an ATM that captures information about your account when you swipe your card. At the same time, you're being videotaped or watched by a tiny camera that's hidden near the ATM's keypad. Within a matter of minutes, a thief has your bank account information and your PIN and is able to create a duplicate bankcard and empty your account.
To prevent skimming, avoid those ATMs that are most at risk such as stand-alone locations or non-bank-related ATMs that you find in stores or gas stations. If you notice an ATM has a device over the card reader or a note instructing you to swipe your card through a different reader, notify the bank, and before you swipe your card, put your hand on the slot and wiggle it — ATMs without skimmers shouldn't move. As always, be sure to cover the keypad when typing in your PIN, and if you notice any withdrawals on your bank statement that you didn't make, alert your bank immediately. Typically, banks will refund your money if you bring the matter to their attention within 60 days.
2. Bogus pizza leaflets
You're on vacation and after a long day of sightseeing with the kids, you just want to feed them dinner and relax in the hotel room. When you return to the hotel, you find a flyer for a local pizza restaurant stuck on your windshield or shoved under the room door, and you call, place an order and give them your credit card information. As you eagerly count down the 30 minutes or less it'll take your pie to be delivered, the fraudsters at the "pizza restaurant" are using your credit card to make purchases.
This pizza flier scam recently got so out of control in Florida that the state legislature banned pizza leafleting; however, it was decided that the decision interfered with the free market and the legislature changed its mind. The best way to avoid being scammed by phony fliers while you're traveling is to consult a phone book or call the hotel's front desk to verify if the restaurant is legitimate.
“We suspect an unauthorized transaction on your account. To ensure that your personal information is not compromised, please click here to verify your identity.”
Sound familiar? Phishing entails sending out messages that claim to be from an organization like a bank or government agency and asking you to confirm your account information — anything from credit card numbers to account passwords. Many of these emails use official company logos or direct you to websites with URLs that, at first glance, might seem legitimate.
If you get an email asking for personal or financial information, don’t click on the link and don’t reply — banks, credit card companies and other businesses will never ask you to verify personal information via email. Forward the message to firstname.lastname@example.org
and to the organization that’s being impersonated, and review your bank account and credit card statements regularly to ensure there aren’t any unauthorized charges.
4. Stranded Facebook friends
Have any of your Facebook friends recently appealed to you for money because they’re stranded abroad and need money for a flight home? Most likely you later found out that your friends weren’t out of the country — they weren’t even out of town — but their account had been hacked. Scammers often look for active Facebook users with a lot of friends and then hack their accounts and attempt to solicit money from kind-hearted people.
If a friend contacts you on Facebook asking for money, don’t send them anything until you’ve spoken with them and verified their story. If a friend is sending out spam on the social networking site or sending repeated messages for money, let them know their account has been hacked and report the situation to Facebook.
5. Work-at-home schemes
Making lots of money by doing simple tasks from the comfort of your own home may sound too good to be true — and it usually is. Such get-rich-quick schemes have been around for decades and involve everything from taking online surveys to assembling jewelry, but perhaps the most famous scheme is the envelope-stuffing scam. In this one, workers pay a small fee to join the organization and are promised money for every envelope they stuff. However, the workers are stuffing envelopes with flyers that recruit other people to stuff envelopes, essentially just perpetuating the scheme.
While real work-from-home employment opportunities do exist, it’s estimated that only one in 42 work-at-home job offers are legitimate. How do you know if it’s a scam? If the pay is too good to be true or payment is required to begin work, it’s most likely not a real employment opportunity.
6. Bad checks
Let’s say you’re selling an expensive item like a car or jewelry online, and when the buyer sends you a certified check, it’s for more than the purchase price. The buyer immediately recognizes the mistake and asks you to send a check back for the extra money, which you do. However, you later find out the cashier’s check you deposited was counterfeit and you’ve already sent your money — and the sold item — to the buyer.
If you’re selling something locally, meet the buyer in a secure location and deal in cash. If you’re dealing with international buyers or an online auction, use a service like PayPal or wait until the buyer’s check clears. Keep in mind that it can sometimes take the bank more than a week to certify that a check is good.
7. Imposter scams
In these schemes, a fraudster poses either online or on the phone as a friend or relative in desperate need of financial assistance. These scams typically play out via email with someone asking for money because they’ve been injured, arrested or stranded abroad. However, senior citizens are often targeted for these scams over the phone and asked to send money to bail out a grandchild or help them get home.
Successful schemes take $3,000 to $4,000 on average, and according to the Federal Trade Commission, imposter scams are one of the fastest growing types of fraud. If you get a call or an email from a friend or relative in need of monetary assistance, contact other friends or family to verify the story, and never give out financial information over the phone or send money to an unknown source.
Click for photo credits
Photo (ATM): ZUMA Press
Photo (computer password): jupiterimages
Photo (flier): Wikimedia Commons