Every year, people tempted by the lure of getting more money fall prey to fraudulent investments and the con men behind them. Fraud investigation services have helped people stay away from getting cheated of their well-earned money, but with 8 out of 10 consumers receiving a fraudulent offer, people still get conned on a regular basis. If you want to stay safe and avoid getting caught in a con job, you have to know the telltale signs of the most popular ones out there.
#1 – Nigerian Scam
How it happens: The victim receives an email from someone from a foreign country – usually a prince in Nigeria – saying they need to transfer a huge amount of money. The fraud will then ask for the victim’s bank account. They will also ask that the victim shoulder the (expensive) transfer fees.
Worst case scenario: The victim ends up sending a lot of cash to the fraud AND gets their bank account compromised.
Anything that involves “huge sum” of cash and “needing your complete bank account info” is almost always a red flag. They also hype up the importance of the email by including the amount of cash they want to “transfer” to you, or it’s extremely urgent. Just treat the email as spam.
#2 – Free Lunch
How it happens: Fraud invites the victim to a free lunch. The free lunch session is actually a way to get you to listen to a personal seminar promising huge returns. During this seminar, the fraud attempts to get the victim to sign up by paying the registration fees or investing a small capital. After the meeting, the fraud will never be seen or heard from again.
Worst case scenario: The victim invests a large amount of money and gets nothing in return, while the fraud gets away scot-free.
This fraud capitalizes on two things: gaining your trust and earning a favor courtesy of the free lunch. The fraudulent investment scheme may look sound at first glance but it only benefits them. This is why it’s always good to turn down free meals from someone you don’t know.
#3 – Winning the Lottery
How it happens: The victim receives a physical letter, an email, or phone call saying that they won the lottery. The lottery could be in a location they never heard of or in a completely different country. The fraud will either ask them to fill up a claim form online asking sensitive personal info or mail with claiming fees.
Worst case scenario: Identity theft and paying nonexistent claiming fees.
Lotteries are random so there may be a chance that you won something, but not if you didn’t even buy a ticket. Ignore this, or if you manage to get their contact details, let the authorities know.
#4 – Penny Stocks
How it happens: Scammer convinces multiple victims to invest in low-priced stocks. Most of the stocks belong to niche markets and other things that have a “huge potential”. Instead of growing at an exponential level, the fraud sells the victims’ shares as the prices go down.
Worst case scenario: Huge financial loss, depending greatly on how much the victim has invested.
Legit investments at the stock market is already a risky thing in itself; investing in something that hasn’t even seen a rising trend is doubly so. You have to accept the fact that there’s no shortcut to successful trading and work on more conservative investments (or hire a legit stock broker).
#5 – Cheap Home Improvement Services
How it happens: Scammer offers dirt-cheap home improvement services ranging from remodeling to roof repair. They ask for either an initial payment or ask the victim to file an insurance claim for the repair. Once they have the money, they do haphazard work (if any) before cutting all communication with the victim.
Worst case scenario: Your home still needs improvement and you’re blacklisted by your insurance provider.
Also known as storm chasers because they often show up in areas recently hit by storms, the best way to avoid them is to make sure they have a legitimate business address within your area. This is also a big reason why you’d want to check a contractor’s credentials before hiring them.
These are just some of the common ways people get scammed; scammers can get creative when it comes to getting money from poor unaware victims. By learning more about how they work and how to avoid them, you can keep your well-earned money away from their thieving hands.