Skimmers

Skimmers are small devices that can read a credit or debit card and capture the information on the card for scam artists.  They may be installed on an ATM or a gas pump or any other device into which you directly swipe your credit card or debit card.  They may also be used as a portable device by a criminal clerk or waiter who takes your card and not only runs it for the legitimate charge for whatever you are purchasing, but also runs it through the skimmer to capture the information to steal access to your credit card or debit card.

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As much as possible, when giving your credit or debit card to a clerk or waiter, watch the card to make sure that it is not swiped through a skimmer as well as through the legitimate credit card processing machine.  Many restaurants now bring the card processing apparatus to you at your table to avoid this type of criminal activity.

And while you are at it, you should consider using your debit card less because unlike a credit card, the laws that protect you in the event of fraudulent use of the card are greatly limited.  While your liability for fraudulent use of your credit card is limited by law to no more than fifty dollars, your potential liability for fraudulent use of your debit card that you do not catch in a timely fashion could be the emptying of the checking account to which your debit card is attached.

Area Code 809

Have you ever heard of area code 809?  Don’t feel bad if you haven’t because it probably is not an area code with which you would be familiar unless you make a lot of calls to the Caribbean.   Similar to the 900 scam, you may receive a call in your voice mail telling you that you have won a contest or even that someone you know has gotten into difficulties and needs your help.  In any event, you are prompted to call a number beginning with the area code 809 which at charges of $25 per minute can run up your phone bill to outrageous levels quite quickly.

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Always be skeptical of any call instructing you to call the area code 809 unless you truly do know who is calling and that they are in the Caribbean.

Phony Diplomas

A College degree can help you land a good job, but a phony diploma from an organization granting worthless college degrees that require you to do little, if any academic work, but gives you large credit for your “life experience” is just a diploma mill that can, in fact, hurt your chances of getting a job.  There also are easy to recognize scams that just lure people into being a part of the scam by selling you counterfeit diplomas of legitimate colleges.  Either way, you should avoid these education scams.  Some states, such as Oregon have even made it a crime to use a diploma from one of these phony colleges.

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“What’s in a name?”  If you studied Shakespeare in college, you would know that quote comes from “Romeo and Juliet.”  Always check the name of phony colleges because the names may be quite similar to legitimate colleges.  Columbia State University is a diploma mill.  Columbia University is an Ivy League college.  Check out the school at the U.S. Department of Education’s website at www.ope.edu.gov/accreditation to see if the particular institution of higher learning is an accredited college.

Lotteries and Contest Scams

Year in and year out, lottery and contest scams are some of the most lucrative scams for conmen.  You may be told that you have won a large lottery or contest.  To further gain your confidence, you may even be told that the contest or lottery has been approved by the FBI or that the contest is sponsored by a big company with which you may be familiar, such as Clorox, a legitimate company whose name was used by scammers to steal money from unsuspecting victims.  Most of these lottery scams involve you having to pay various processing fees or even income taxes to the lottery sponsor.

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It is hard enough to win a contest you enter, so you should be particularly wary when told that you have won a contest that you never even entered.  Legitimate contests and lotteries do not have processing fees that you have to pay and they do not collect income taxes from you.  The sponsor either would pay the taxes on your behalf or provide you with an IRS Form 1099 informing you of how much money was paid on your behalf to the IRS or you would be responsible to pay the IRS directly.  You would not pay the income taxes on the prize to the contest sponsor.

And beware of your winnings coming to you in the form of a certified bank check.  Unsuspecting victims have deposited these checks and waited for the check to clear before sending processing fees only to find that the check was a forgery and their own bank had only given them provisional credit for the check so that once it bounced, the victim not only lost the “winnings” but also the processing fees.

Loan Scams

In desperate times people often let their guard down, which provides a lethal combination for scammers offering loans to people even if they have poor credit.  You may get a solicitation for the loan through an email or you may even see it in legitimate media, but you should always beware.  Just because an advertisement for a loan appears in a legitimate newspaper or other media does not mean that the loan offering has been investigated for legitimacy by the media carrying the advertisement.  In fact, in difficult financial times when advertising dollars are hard to come by, the standards of media for taking advertisement seem to drop.

You may be surprised at how fast your sham loan is approved.  All you have to do is to send in an advance processing fee and you are on your way to financial stability.  Unfortunately, the loan is a scam and you end up more in debt when you pay for a worthless loan.

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Legitimate lenders rarely ask for advance fees.  They usually deduct fees from the loan amount.  Check with your state’s attorney general or the FTC if you have questions about an unfamiliar lender.  And if the loan requires an advance fee, don’t do it.  Chances are it is a scam.  Also, even if you don’t have to pay an advance fee, always be sure the lender is legitimate before you provide any information such as your Social Security number which could be going to an identity thief who is merely using the promise of a loan as a ruse to obtain personal information from you.

Unclaimed Property Scam

You may receive an email or letter informing you that there are billions of dollars of unclaimed or abandoned money being held by the states and federal government and that some of that money is yours.  For a fee, the person or company contacting you will assist you in locating that property claiming it for you.

The truth is that indeed various state and federal agencies are holding more than 24 billion dollars of unclaimed money that is waiting to be retrieved by the rightful owners.  State laws require financial institutions, such as banks, to turn over money from inactive accounts.   Among the assets held by these agencies are savings and checking accounts, stocks, uncashed dividend checks, certificates of deposit and utility security deposits.

Where the scam comes in is when you are asked to call a company’s 809 telephone number for more information.  Unfortunately, this call will run up a steep charge on your telephone bill and the only information you will get is general useless information as to how you can claim the money yourself or pay them a steep fee for doing it for you.

Some “legitimate” companies may also contact you to assist you in getting back your missing money, but it is important to remember that they cannot have any specific information as to what you are owed because of privacy regulations that prohibit them from obtaining that information.

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The best place to find a helping hand to assist you in locating and getting back your abandoned property is at the end of your own arm.  Go to the website of the National Association of Unclaimed Property Administrators at www.unclaimed.org where you can link on to the website for your own state’s agency that deals with abandoned property and take the steps necessary to claim your abandoned property at no cost to you.  Other useful websites for locating money that you may be owed include www.irs.gov, the website for the IRS where you can find tax refund money you may be owed and www.pbgc.gov, the website of the Pension Benefits Guaranty Corporation, a federal agency that holds unclaimed pension funds.

Natural Disaster Scams

Natural disasters, be they hurricanes, tsunamis, tornadoes, wildfires or floods are fodder for the most vile of scammers who take advantage of both the victims of these disasters and people who wish to make charitable donations to the victims of charities.  The scammers take advantage of those people already victimized by posing as government agency employees or insurance adjusters.  In the process of their interviewing the victims, they request personal identifying information, such as Social Security numbers and then use this information to make the victims of the natural disaster victims of the unnatural disaster of identity theft.  The scammers take advantage of people wishing to donate to the victims of natural disasters through phony charities.

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If you are a victim, you must confirm the identity of anyone who contacts you purporting to be from a governmental agency or insurance company.  Do not give out any information until you have checked them out by contacting the actual agency or insurance company that they claim to represent.

As for charitable donations, go to www.charitynavigator.org and check out the charity to see if it is legitimate and while you are there, you may wish to check on the amount of the money gathered by the particular charity that actually goes toward their charitable purposes and how much goes to administrative costs and salaries.  A reputable charity should not pay more than between 25 and 35% to salaries and administrative expenses.  Additionally, if you are contacted by someone soliciting on behalf of a legitimate charity, you should be aware that as much as 80% of what is collected by professional charity solicitors goes to the actual charity for which they may be soliciting.  If you are inclined to donate to the charity, you may wish to consider donating directly to be confident that more of your donation actually is going to benefit the charity to which you wish to donate.

Psychics and Fraud

Letters, email or telephone calls from psychics either offering good fortune or the ending of bad fortune are common scams.  The positive psychic scams occur when the psychic promises to share a secret with you that will bring you fame and fortune.  Often the psychic offers to sell you a special good luck charm that is guaranteed to bring you good fortune.    The negative psychic scam occurs when you are told that you are in danger from a demonic force and that if you do not send money to the psychic to ward off the threatening force, something terrible will happen to you.

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If you want to believe in psychics, it is your business, but when you receive an unsolicited email, letter or telephone call from someone claiming to be a psychic, it doesn’t take a psychic to predict it is a scam.

Affinity Fraud

We all tend to trust people who are just like us.  That is a truism.  With a knowledge of psychology that would make Sigmund Freud envious, conmen use that trust to their advantage.  Scammers know that once they have a potential victim’s heart and trust, their wallet soon follow.

We are experiencing an epidemic of fraud that targets particular nationalities, ethnic groups, racial groups, fraternal organizations and religious groups.  Religion related scams are particularly common.  Bernie Madoff was guilty of tremendous affinity fraud within the Jewish American community.  A scam artist may join a particular church, synagogue or mosque and gain the trust and confidence of the congregation by making a significant contribution to the religious organization.  But this is just see money.  Scammers often target members of a religious, ethnic, fraternal or other group that they appear to belong to and offer “special” investment opportunities that ultimately turn out to be worthless.

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You should never trust anyone who asks you to trust him.  Always do your homework before you invest your money.  The endorsement of someone you know and trust is no substitute for real research into any investment.

Nigerian Letter

Although it may seem as if this scam only began in earnest with the invention of email, in fact, the scam itself is just a variation of a scam that is more than four hundred years old when it was called the Spanish Prisoner Con.  At that time a letter was sent to the targeted victim purportedly from someone on behalf of a wealthy aristocrat who was imprisoned in Spain under a false name.  The identity of the nobleman was not revealed for security reasons, but the victim was asked to help raise money to obtain the release of the aristocrat, who, it was promised, would reward the money-contributing victim with great sums of money and, in some versions of the con, the Spanish prisoner’s beautiful daughter in marriage.

In the more recent incarnations of this scam, you receive an email in which you are promised great sums of money if you assist a Nigerian in his effort to transfer money out of his country.  Other variations include the movement of embezzled funds by corrupt officials, a dying gentleman who wants to make charitable gifts or a minor bank official who is trying to move the money of deceased foreigners out of his bank without the government taking it.  Similar scams have managed to keep up with the news by having the money to be moved tied to fallen dictators such as Sadaam Hussein or Moamar Khadaffi.

What all of these scams have in common is that soon after agreeing to help, you learn that money is needed to be sent by you for lawyer fees, bribes, insurance and other costs.  The reward is always just around the corner and the fees keep mounting.

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There are a number of ways to confirm that the email you are receiving is a scam including a careful review of the email address, however, you do not need to even go that far in your considerations.  Although you may want to open the email (so long as you do not click on to any links) for sheer entertainment purposes, all of these scenarios are scams.  Just ask yourself, why are you being singled out for this email?  You are not.  The emails are sent out all over the Internet.  Don’t be a victim.  Do not respond to the email in any fashion.  If you do, you will be hounded.