Scam Speak!

 

"Knowledge is Power"

If you hear any of these lines, your fraud alarm should start buzzing.

Many scam artists employ time tested techniques. Here are common pitches to watch out for.

- "Just wire the money" Wire transfer is the most common way con artists get cash from their victims, according to the National Consumers League. Unlike with credit cards, you have no way to stop payment or recover funds. So the perp is sure to get his money.

- "Cash this check" Cons often win trust by sending you what looks like a real check. They may ask you to cash it and return all or a portion of it to them to cover fees or an overpayment. The check will invariably bounce, and you'll be on the hook for the money.

- "I'm contacting you from [insert foreign country name here]" Anytime a stranger offers you an easy money proposition, be suspicious - but be especially so if the stranger is overseas. Scammers like to operate outside the U.S., where it's harder for authorities to prosecute them.

- "You're guaranteed a 10% return every month" To get high returns, you have to take high risk. As a benchmark: The stock market's long-term return is 10% a year. Any deal that "guarantees" that or more is a scam.

- "Don't tell anyone else about this opportunity" Con artists often discourage you from talking about an opportunity with anyone who could talk you out of it or who could really check it out.

- "Only a few lucky investors can get in, so you must act right away" Scammers like to give the impression that the deal has a deadline, in hopes you'll hand over your money before doing any due diligence. Resist the pressure. Get all the information before making a decision.

Opportunity or scam? These resources can help you find out.

If someone is pitching you a financial product (such as a stock, a bond or an investment fund)...

• Use the NASD's BrokerCheck service (www.finra.org or 800-289-9999 ) to verify that the person is licensed to sell securities; to check for any customer complaints, regulatory fines or criminal convictions; and to find out whether the product being pitched is registered.

• Contact your state securities regulator (find it via http://www.nasaa.org/home/index.cfm) to see if an investment firm or adviser is licensed locally.


If someone is offering you a service or business opportunity (such as a work-at-home job or a loan)...

• See if your local Better Business Bureau (lookup.bbb.org) has any complaints on the company. The BBB also has reliability report cards (http://search.bbb.org/) on nearly 2.5 million businesses.

• Contact the Federal Trade Commission (ftc.gov or 877-382-4357 ) to find out if the FTC has taken an enforcement action against the company that is pitching you.


If it's anything else that sounds too good to be true (such as a notice that you have won a prize)...

• Google it. Plug the name of a company and its owners into a search engine; you might also add the word "fraud" or "scam" to narrow the search. If there's any negative feedback out there, you'll likely turn it up.

• Visit the Scam Alerts section of FirstGov for Consumers (www.consumer.gov) to check on the latest list of cons and tips on how to avoid them.

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