How to Spot a Scam

frugalhomediy May 14, 2012 0

When trying to make, save, or invest your money you will inevitably encounter a scam. In fact, there have been several occasions when someone has called me with this “great opportunity” and all they needed was my credit card or bank account number. Avoiding a scam might seem like common sense, but people get scammed out of their money everyday. You can learn how to avoid a scam if you can identify the elements of a scam. Some common elements of a scam are…

  • Get rich quick. If there are amazing claims that you will get rich in a short period of time by doing very little work then it’s probably a scam. While it is possible to get rich quick it’s extremely rare and risky. If someone approaches you with a business opportunity to make millions quickly, be cautious.
  • You pay upfront. It’s certainly a scam if you have to pay before you can start. All they’re trying to do is scam you out of your savings. Also, if you can’t get all the information without paying them money, don’t do it.
  • The way you make money is vague. Don’t participate if what they are telling you doesn’t make sense. Only participate in things that make sense to you.
  • It involves little effort. If you aren’t required to do anything to get paid, it’s a scam. Nothing worthwhile is done without work.

Here are some tips on how to defend yourself….

  • Don’t be a courtesy victim. Con artists won’t hesitate to exploit the good nature of a potential victim. If a stranger calls and asks for your money you should regard them with skepticism. It’s not impolite to say you are not interested.
  • Don’t be rushed. Say no to anyone that pressures you into making a snap decision unnecessarily. If they don’t have the time to explain the investment and be professional then say no. You have the responsibility to research the salesperson, company, and the investment opportunity they are offering you.
  • Never judge a person’s integrity by their appearance. Successful con artists look and sound extremely professional. No matter how professional and experienced they seem to be you should always do your homework before making a decision.
  • Watch out for salespeople that try to instill fear. Con artists know that many people worry and it’s common for them to try to leverage this. They will predict doom and gloom for people that aren’t on board with what they are trying to push.

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