Spam is the name given to unwanted emails sent to you – electronic junk mail. Some people have lost money through spam that contained bogus offers and fraudulent promotions.
Scammers are very cunning – they know how to make their claims seem legitimate. Some spam messages ask for your business, others invite you to visit a website with a detailed story. Many scam emails will come from America or other countries, and will talk about currencies like US dollars.
These tips can help you avoid spam scams:
- Protect your personal information. Share credit card or other personal information only when you’re buying from a company you know and trust.
- Know who you’re dealing with. Don’t do business with any company that won’t provide its name, street address, and telephone number.
- Take your time. Resist any urge to ‘act now’ despite the offer and the terms. Once you turn over your money, you may never get it back.
- Read the small print. Get all promises in writing and review them carefully before you make a payment or sign a contract.
- Never pay for a ‘free’ gift. Disregard any offer that asks you to pay for a gift or prize. If it’s free or a gift, you shouldn’t have to pay for it – free means free.
Many internet service providers and manufacturers offer filtering software to limit the spam in their users’ email inboxes. In addition, a few ‘filter tips’ can help you save time and money by avoiding common email scams.
Here’s how to spot 10 common spam scams:
1. The ‘Nigerian’ email scam
The bait: scammers claim to be officials, business people or family members of former government officials in Nigeria or another country whose money is somehow tied up for a limited time. They offer to transfer lots of money into your bank account if you will pay a fee or ‘taxes’ to help them access their money. If you respond to the initial offer, you may receive documents that look official. Then they ask you to send money to cover costs for transaction, transfers and legal fees, as well as your bank account numbers or other information. They may even encourage you to travel to Nigeria or a border country to complete the transaction. Some fraudsters have even produced trunks of dyed or stamped money to verify their claims.
The catch: the emails are from crooks trying to steal your money or steal your identity. Inevitably, emergencies come up which will require more of your money and delay the ‘transfer’ of funds to your account. In the end, there aren’t any profits for you, and the scam artist vanishes with your money.
Your safety net: if you receive an email from someone claiming to need your help getting money out of a foreign country, don’t respond.
Read more about foreign money offer scams.
2. Phishing
The bait: email or pop-up messages that claim to be from a business or organisation you may deal with, for example, an internet service provider, bank or online payment service. The message may ask you to ‘update’, ‘validate’, or ‘confirm’ your account information.
The catch: phishing is a scam where internet fraudsters send spam or pop-up messages to get personal and financial information from you. The messages direct you to a website that looks just like a legitimate organisation’s site. But it’s a bogus site that exists simply to trick you into revealing your personal information so the operators can use your identity.
Your safety net: never respond to email or pop-up messages that ask for your personal or financial information, and don’t click on links in the message. Don’t cut and paste a link from the message into your web browser – phishers can make links look like they go to a genuine site, but then actually take you to a look-alike site. If you are concerned about your account, contact the organisation using a phone number you know to be genuine, or open a new internet browser session and type in the company’s correct web address yourself. Using anti-virus software and a firewall, and keeping them up to date, can also help.
Read more about phishing scams.
3. Work-at-home scams
The bait: advertisements that promise a large income for minimal work – such as envelope-stuffing, craft assembly work, or other jobs. The ads make similar claims – fast cash, minimal work, no risk with the advantage of working from home when it’s convenient for you.
The catch: the ads don’t say you might have to work many hours without pay, or pay hidden costs to place newspaper ads, make photocopies, or buy supplies, software, or equipment to do the job. Once you put in your own time and money, your promoters may refuse to pay you, claiming that your work isn’t up to their ‘quality standards’. Or you may find that there is no work on offer, only comission for getting other people to sign up.
Your safety net: legitimate work-at-home business promoters should tell you in writing exactly what is involved in the programme. Before you commit any money, find out
- what tasks you will have to perform
- whether you will be paid a salary or work on commission
- who will pay you
- when you will get your first payment
- the total cost of the program (including supplies, equipment and membership fees)
- what you will get for your money.
Can you verify information from current workers? Be aware of ’shills’, people who are paid to lie and give you every reason to pay for work. Get professional advice from a lawyer, an accountant, a financial adviser, or another expert if you need it, and check out the company with your local Trading Standards Service.
Read more about work at home scams.
4. Weight Loss Claims
The bait: emails promising a revolutionary pill, patch, cream, or other product that will result in weight loss without diet or exercise. Some products claim to block the absorption of fat, carbs, or calories, others guarantee permanent weight loss and some suggest you’ll lose lots of weight at lightning speed.
The catch: these are gimmicks, there’s nothing available through email you can wear or apply to your skin that can cause permanent or even significant weight loss.
Your safety net: experts agree that the best way to lose weight is to eat fewer calories and increase your physical activity so you burn more energy. There are no products that can instantly remove fat.
Read more about health cure scams.
5. Foreign lotteries
The bait: emails boasting enticing odds in foreign lotteries. You may even get a message claiming you’ve already won! You just have to pay to get your prize or collect your winnings.
The catch: most promotions for foreign lotteries are phony. The scammers will keep any money you send for ‘taxes’ or fees. In addition, lottery scammers use victims’ bank account numbers to make unauthorised withdrawals or their credit card numbers to run up additional charges.
Your safety net: skip these offers. Don’t send money now on the promise of a pay-off later.
Read more about lottery scams.
6. Cure-all products
The bait: emails claiming that a product is a ‘miracle cure’, a ’scientific breakthrough’, an ‘ancient remedy’ – or a quick and effective cure for a wide variety of ailments or diseases. They generally announce limited availability, and want payment in advance, and offer a no-risk ‘money-back guarantee’. Case histories or testimonials by consumers or doctors claiming amazing results are not uncommon.
The catch: there is no product or dietary supplement available via email that can deliver on claims to shrink tumors, cure insomnia, cure impotency, treat Alzheimer’s disease, and prevent severe memory loss.
Your safety net: be sceptical about health related claims. Consult a health care professional before buying any ‘cure-all’ that claims to treat a wide range of ailments or offers quick cures. Generally speaking, cure all is cure none.
Read more about health cure scams.
7. Cheque overpayment scams
The bait: a response to your ad or online auction posting, offering to pay with a cheque. At the last minute, the so-called buyer (or the buyer’s ‘agent’) comes up with a reason for writing the cheque for more than the purchase price, and asks you to transfer back the difference after you deposit the cheque.
The catch: if you deposit the cheque, you lose. Typically, the cheques are counterfeit, but they’re good enough to fool bank staff – when they bounce, you are liable for the entire amount.
Your Safety Net: don’t accept a cheque for more than your selling price, no matter how tempting the plea or convincing the story. Ask the buyer to write the cheque for the purchase price. If the buyer sends the incorrect amount, return the cheque. Don’t send the goods.
8. Pay-in-advance credit offers
The bait: news that you’ve been ‘pre-qualified’ to get a low-interest loan or credit card, or repair your bad credit even though banks have turned you down. But to take advantage of the offer, you have to pay a processing fee of several hundred pounds.
The catch: a legitimate pre-qualified offer means you’ve been selected to apply. You still have to complete an application and you can still be turned down. If you paid a fee in advance for the promise of a loan or credit card, you’ve been scammed. There may be a list of lenders, but there’s no loan, and the person you’ve paid has taken your money and run.
Your safety net: don’t pay for a promise. Legitimate lenders never ‘guarantee’ a card or loan before you apply. They may require that you pay application, appraisal, or credit report fees, but these fees are not usually asked for before the lender is identified and the application is completed. In addition, the fees generally are paid to the lender, not to the broker or person who arranged the ‘guaranteed’ loan.
9. Debt relief
The bait: emails promise a way you can consolidate your bills into one monthly payment without borrowing and stop credit harassment, repossessions or wipe out your debts.
The catch: these offers can involve bankruptcy proceedings, but rarely say so. While bankruptcy is one way to deal with serious financial problems, it’s generally considered a last resort. This is because it has a long-term negative impact on your creditworthiness. A bankruptcy stays on your credit report, and can make it harder to get credit, a job, insurance, or even a place to live. To top it off, you are likely to be responsible for legal fees for bankruptcy proceedings.
Your safety net: read between the lines when looking at these emails. Before resorting to bankruptcy, talk with your creditors about arranging a modified payment plan, contact a credit counselling service to help you develop a debt repayment plan, or carefully consider a second mortgage or home equity line of credit. One caution – while a home loan may allow you to consolidate your debt, it also requires your home as guarantee. If you can’t make the payments, you could lose your home.
10. Investment schemes
The bait: emails touting ‘investments’ that promise high rates of return with little or no risk. One version seeks investors to help form an offshore bank. Others are vague about the nature of the investment, but promise high rates of return. Promoters hype their high-level financial connections or the fact that they know inside information, or sometimes that they’ll guarantee the investment, or that they’ll buy it back. They sometimes serve up phony statistics, misrepresent the significance of a current event, or stress the unique quality of their offering.
The catch: many unsolicited schemes are a good investment for the promoters, but not for you. Promoters of fraudulent investments operate a particular scam for a short time, close down before they can be detected, and quickly spend the money they take in. Often, they reopen under another name, selling another investment scam.
Your safety net: think carefully about investments – the higher the promised return, the higher the risk. Don’t let a promoter pressure you into committing to an investment before you are certain it’s legitimate. Strongly consider asking an accountant to take a look at any investment offer.
Read more about share investment scams.
Source: Office of Fair Trading, UK
Do you like to be updated in Accountancy ?
Subscribe to Management Accountant by Email
Or
You may also like to read
Filed under: fraud
Recent Comments