Learn About Common Financial Scams

July 7th, 2021 by

Photo by Olya Kobruseva / Pexels

In today’s world, there are many people who are looking for a quick buck, and to do this they no longer have to meet you in person. 

With the advent of the internet, as well as the modern convenience of online bill paying, online banking and other electronic ways of transferring funds comes the opportunity for people to scam you out of your savings at a click of a button.

Here are the categories of scams and what you can do to avoid being taken advantage of, according to the Consumer Financial Protection Bureau.

Debt Collection Scams

Debt collectors will call you on legitimate debts you owe. Scammers who act as debt collectors will try to get you to pay for debts that you don’t owe or you may have already paid off. 

The most important thing to do is not to give out any financial information to them until you can validate the debt. You should request the caller’s name, company, street address, and telephone number. 

In most cases, the scam artist may be unwilling to give the information to you or begin to threaten you with criminal charges if you do not give them the information they are asking for. 

You can inform the caller that you refuse to discuss any matters until you get a written validation notice. This notice must include the amount of the debt, the name of the creditor you owe, and a description of certain rights under the Federal Fair Debt Collection Practices Act.

You may receive a call from someone promising that they can reduce the amount of your credit card debt by negotiating with your creditors or combine all your debt together. They claim that you’ll just make one payment a month and they will then pay your debtors from that one monthly payment. 

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Sound too good to be true? Well, there are many legitimate companies out there who do provide this service and to some people, it is a great way to get debt relief or to help them better re-organize their financial matters.

What you need to look out for are companies who insist that you pay any amount upfront before they will discuss their programs available. Or if they claim that they guarantee that your creditors will forgive your debts. These are signs that they are not a legitimate company.

Mail Fraud

Scammers have become very good at drafting letters that look real but their offers are fraudulent. An example would be a letter asking for personal information or to send money now to receive something later, but that never comes. 

This type of fraud can also be sent to you via email where they may say you have unclaimed money and click the link to enter your information so they can wire you the money into your account. Again, if it sounds too good to be true then it probably is.

Mortgage and Foreclosure Scams

This type of scam convinces homebuyers who are about to close on mortgage loans. The scammers attempt to get you to wire or transfer your down payment to them. 

They do this by sending out a fake email pretending to be the new homeowners’ realtor or settlement agent. 

In a foreclosure scam, the scammers make the promise of being able to save your home for a price and/or pretend that they are a loan modification company that can re-do your home loan for a fee.

Related: What is the Overdraft Opt-in Choice on your Checking Account?

Imposter Scams

Have you ever received an email from a friend saying they have been traveling abroad and found themselves in trouble and need money to get back home? How about receiving a phone call asking to contribute to the local police retirement account. If so, you were most likely targeted by an imposter scammer

These scammers try to take your money by pretending to be a person or organization that needs financial assistance. One way you can validate if there is a true request is to ask for additional information, such as the organization’s address and phone number so that you can contact them to set up a donation. 

If it is a friend requesting assistance, call your friend and just ask them if they have been traveling and to see if they are okay.

When it comes down to it, the most important thing to remember is to validate every request you receive if they are asking for personal or financial information. 

If you cannot validate the legitimacy of the request, then do not give out your information.


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