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How To Avoid Getting Scammed

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How To Avoid Getting Scammed Powered By Docstoc
					by: Dean Phillips

Listed below are some of the most popular and common scams:

1. Nigerian Letter Scam:

This one's been around for many years but continues to flourish. Many of these e-mails claim to
be from a person in Africa, usually Nigeria. The writer claims to have access to millions of
dollars, either from a relative or from knowledge of an idle account. A percentage of this money
is promised to the victim if they will allow the money to be processed through their personal
bank account. The victim is instructed to keep their share and send the remaining money to the

The check given to the victims is fraudulent. The victim is then liable to the bank for the check
they wrote to the scammer.

Here's what will happen when you give strangers your bank account information: They will take
your money. Period.

2. Phishing Scams:

"Phishing" is a high-tech scam that uses spam or pop-up messages to deceive you into disclosing
your credit card numbers, bank account information, Social Security number, passwords, or other
sensitive information.

Phishers send an e-mail or pop-up message that claims to be from a business or organization that
you deal with--for example, your Internet service provider (ISP), bank, online payment service,
or even a government agency. The message usually says that you need to "update" or "validate"
your account information.

Recent phishing victims include Yahoo, Citibank, eBay, Best Buy and Bank of America among

If you get spam that is phishing for information, forward it to

3. Chain Letters:

In this classic scam, you're asked to send a small amount of money (usually $5.00) to each of
several names on a list, and then forward the letter including your name at the top of the list, via
bulk e-mail. Many of these letters claim to be legal. They even include a section of the U.S.
Postal Code on illegal schemes. Don't be fooled. They are not legal. And if you participate, not
only will you be breaking the law, you'll lose your money as well.

4. Work-At-Home And Business Opportunity Scams:
These scams tempt victims with ads stating "no experience necessary," promise high earnings
and claim to have inside information. The scammers usually require victims to pay anywhere
from $35 to several hundred dollars or more for information, kits or materials that do not provide
the promised results.

Frequently, these schemes involve making handicrafts, stuffing envelopes, medical billing, or
state, "Use your home PC to make money fast in your spare time!"

In the craft making or envelope stuffing scam, after paying fees and completing the assembly of
the products, victims are told their work is low quality and unworthy of compensation.

Medical billing scams require victims to purchase supplies and lists of doctors who, inevitably
don't exist or are not interested in the service.

5. Bulk E-mail Scams:

These solicitations offer to sell you bulk e-mail addresses (spam software) or services to send
spam on your behalf. Example: "Reach 100 million websites, $39.95"! The software is usually of
poor quality. It's spam and a scam. Don't do it.

6. Auction and retail scams:

These schemes typically offer high-value items, such as Cartier watches, Beanie Babies and
computers, in hopes of attracting many consumers. What happens is the victim wins the bid,
sends the money and receives nothing or receives products of much lower quality than

7. Guaranteed Loans or Credit Scams:

This scam comes in a variety of flavors: home equity loans that don't require equity in your
home, personal loans regardless of credit history, etc. After you pay the application fees, you
receive a letter saying that your loan request was denied. Usually, you never here from these
companies again.

8. Credit Repair Scams:

These scams promise to erase accurate, negative information from your credit file so that you can
qualify for loans, mortgages, unsecured credit cards, etc. It doesn't work. Not only that. If you
follow their advice and lie on loan or credit applications, misrepresent your social security
number, or get an Employer Identification Number from the Internal Revenue Service under
false pretenses, you will be committing fraud and violating federal laws. Another variation of
this scam is the promise of a brand new credit file. Don't do it.

9. Vacation, Sweepstakes And Prize Award Scams:
In these scams you receive notification congratulating you because you've won a fabulous
vacation, a car or some other prize award. All you have to do to collect your prize is pay a small
fee (usually several hundred dollars). In return, what you end up getting is a toy car, (I kid you
not) or a vacation certificate to the Bahamas or some other exotic vacation spot. It's really a lousy
deal. You have to pay for your own airfare, and the accommodations that they arrange are
usually in rundown hotels. Let the buyer beware!

10. Employment Scams:

Employment scammers take advantage of job seekers. They claim to offer employment services,
inside information or inside contacts to jobs. After paying a fee, victims learn they only provide
advice, help writing a resume--or less. Some fraudulent employment services simply sell lists of
companies that they have gotten from public directories. They usually have not contacted those
companies directly or know if there really are any job openings.

11. Multi-level Marketing (MLM) or Network Marketing Scams:

I know I'm going to ruffle a few feathers with this one, so let me just say right now that all MLM
or network marketing companies are not scams. Obviously, there are some good, reputable
companies out there. However, there are so many bad ones that I'm compelled to include the
entire industry on this list. Before getting involved with any MLM or network marketing
company, investigate, investigate and then investigate some more. Don't get caught up in the
hype. And here's a fact no MLM or network marketing company will ever tell you--not even the
legitimate ones: Unless you have outstanding sales ability and/or people skills, it is extremely
difficult to make any money in MLM or network marketing.

Here are some other things you should watch out for: Make sure the website youre visiting
contains all three of the following:

   1. A real persons name (not just a company or business name)
   2. A telephone number
   3. A street address (not just a P.O. Box)

If all three of the above are not present, walk away from the offer.

Before purchasing anything, you should always check first to see if the company has had any
complaints lodged against it. The following websites publish complaints and/or scams:


If you do get scammed, report it to the aforementioned websites immediately. You probably
wont be able to recover your money. Few people ever do. But at least by reporting the crime and
making it public record, you make it harder for that company to scam anyone else.
In closing, always carefully investigate any business opportunity, and remember: If it sounds too
good to be true, it probably is!

This article was posted on October 09, 2004

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