Protect Yourself from Scams

Protect Yourself from Scams

by Mary Suplee on Apr 26, 2018

The Pennsylvania Department of Banking and Securities recently sent me a publication with information about some of today’s most common scams and tips to protect yourself and your money. There is also information on how to contact government agencies, nonprofit organizations and credit bureaus that can help you protect yourself or help you if you’ve fallen victim to a scam.

The following are some of the more common recent scams to be aware of:

  • Pay Up Front Scam asks victims to pay advance fees or upfront payments for loans, refinancing or credit cards. Avoid any offer that requires an upfront payment. It is generally subtracted from the loan amount. Be cautious when asked to pay via wire transfer or prepaid debit card and if you’ve never heard of the company, do some research to learn more about them.
  • Ponzi Schemes depend upon a steady stream of investors who are promised abnormally high rates of return. Eventually the investors dry up and the scheme collapses. Some red flags are offerings of a quick, speculative investment, promises that the investment is risk free, promoters targeting your social circle or the profits of the early investors as proof. All legitimate investments involve risk; beware of promises of high or guaranteed returns or “risk free” profits. Don’t be rushed into making a decision and check out the promoter’s background and whether the security is registered with the regulators. Get detailed information in writing and verify claims.
  • The IRS Scam is a phone call or email from someone claiming to be from the IRS or US Treasury threatening arrest or a lawsuit for unpaid taxes and demanding that you wire money or buy prepaid debit cards. Important information from a government agency will always come in the mail. They won’t call you and demand money. If it seems legitimate, don’t trust the phone number they give you. Take the caller’s name and look up the number for the actual agency.
  • Affinity Fraud is when a con artist claims to be a member of the same ethnic, religious, career or community group and seeks out investors based on predictions of financial or social chaos. Don’t be rushed into any decision. First obtain a prospectus and get a professional second opinion from someone outside the group.
  • In addition to these, a number of other known scams and tips on how to protect yourself are included in this publication such as Charity scams, International Lotteries, the “Microsoft” scam, Credit Repair and Romance scams. The Pennsylvania Department of Banking and Securities has numerous free publications for consumers on their website at dobs.pa.gov as well as contact information for other government agencies and credit bureaus.
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