Beware Of Scams

One of the biggest negatives about the internet is that it has become much easier for those nasty people who enjoy spending their time trying to part people from their money and/or personal information.

***Please note that you should always be aware of anything suspicious and seek legitimate help.

SEVERAL CURRENT SCAM WARNINGS.

The first one is a hot one currently and is called the Google Phishing Attack.

Because this is a long post, I am adding the link to it in its entirety.

The second one can potentially be financially disastrous. DON’T SAY YES!!!

Here is the link in its entirety.  DON’T GET CAUGHT OUT!!!

Employment.

Let’s look at job scams next. The most blatant type of ad promises fast, easy money and you only have to pay “a small amount” of money upfront to purchase a “starter’s kit” and that kit is supposed to have all the answers to help you make LOTS of money. NEVER pay anything to get a job. Genuine jobs never ask people to do this.

If ads ask for your resume and personal details before they give you any info about the job, they’re usually scams. A genuine employer, even if it’s real online work, will never ask for personal details and a resume before giving you the information about the job so you can determine if it’s the right fit for you.

Unemployed people and those in debt are often desperate to find paying work and so it’s common for people to put the blinkers on and just focus on the “prize,” not the scammy other “so-called genuine requirements” that go along with it.

If you’re looking for freelancing work, some potential employers may ask for free samples if you do writing work or they may want to see your portfolio if you do other work.

A portfolio is a wise and necessary aspect of your website, and, yes, if you plan on freelancing, then that’s a whole other world to delve into.

You may be asked to do work and then get paid for it. However, once it’s done, they may not pay you. Others may promise a lot more, better paying work, after you do an initial job for peanuts. Don’t believe them unless they have proof.

The real estate con.

Do you want to invest in real estate? Maybe you don’t have the funds to begin. That doesn’t matter. Maybe you don’t have credit or money. That won’t matter either. The good news is that you can get in with zero dollars down. Just invest in their $2000 course and spend a further $5000 to attend their three day major seminar.

The next thing you know… you’ve wasted $7000 and can’t contact those people anymore. There’s no company backing it all and no way to get your money back. Yes, you can make money investing in real estate but you need to be smart about it and not fall for the con-artists out there.

Stock market scam.

Microcap penny stocks. This involves investing a tiny amount of money and reaping big rewards. Companies offer stocks for an obscenely low amount of money. Individuals find tips online in many places and make their investment. The purpose of this scam is to push the price of the stocks up quickly and then the initial investors/scammers rake in the money and then just disappear. If you wish to buy shares, do a thorough investigation of the company first and only buy from reputable companies.

Pet scams.

Most people love pets, whether dogs, cats, birds or something else. Sadly, pets do pass away and leave a hole in your heart, making you an easy target. You start by searching online to find a replacement pet. You’ll see lots of ads, many genuine, BUT some are scams. Firstly, the person and the animal live in a different State or a long distance from where you live. They say they won’t charge you anything because all they want is a good home for their pet (and they make up a sad story as to why they need a new home). You’re only asked to pay the plane fare and any fees at the airport in advance. DON’T do it!!! Once they have your money, you’ll never hear from them again.

Oil rigs.

You may be running ads to sell things on a classified ad site such as Craigslist or Gumtree. A person contacts you, claiming to be working on an oil rig for a few months but they really want what you’re selling. They ask you to send it to them and they’ll reimburse you the costs for shipping as well as the purchase price. However, because you don’t know the shipping fees, etc, you need to cover them and the buyer will reimburse you…sound fishy? You’re right. You will never be reimbursed and that person is guaranteed NOT to be on an oil rig.

A simple but highly effective money laundering con.

This scheme starts with you finding an ad that promises good money for doing very little. Then emails go back and forth until you decide to give it a go. What you need to do is give that person your banking details so he can put money in your account.

Once you have done that, you withdraw most of it but retain a fee for your services. The rest you have to send via Western Union Wire Transfer to the person in some obscure country. Scepticism turns to disbelief when you do the first transaction and find it actually works. You get maybe $9000 in your account and you send off $7500. So in one transaction, you make $1500. What happens then is that you get a few more of the same deals. Each one has different amounts, all under $10000. Within a week you can make $5000 for yourself.

While it does sound easy, you’ll inevitably get a call from the fraud department of your bank. That person explains that what you have done is illegal and could potentially involve jail time if you don’t cooperate. The bank person says you won’t be charged if you give him all the info you have on this scheme, including contact details. Banks aren’t concerned about putting cooperative victims in jail. They want to find the culprit who has probably been scamming lots of people and raking in the cash.

Phone scams.

There are lots of phone scams going around. This is one of the serious ones.

You’ll get a phone call from somebody claiming to be from the Australian Tax Office/ATO/Tax Department. This caller says you that you have an outstanding debt of anywhere between $4000-$9500 and that it must be paid immediately or the police will come and take you away. That’s enough to frighten most people and even those who say they’re not gullible can get sucked into this one.

The caller will stay on the phone with you while you get in your car, drive to your bank, withdraw the money and then send it to that person via usually via Western Union money transfer. NEVER pay anything via Western Union if it’s not for yourself. This caller won’t give you his phone number or it will be a fake number if he does give it.

If you have even the slightest suspicion that it’s a scam, ring your accountant because he’ll know if you owe money. Ring the ATO and they’ll confirm it’s a scam. They’ll tell you that if you did owe money, you would receive numerous written letters before it even got to a debt collector’s stage. They don’t ring you in this threatening manner. NEVER give that person ANY info, including bank details, your full name, address, email, etc.

Computer internet/phone scam.

This one often catches people who may not be very computer-savvy. You receive a call from “Microsoft” or another “official” internet company. The person says you have a serious computer problem. There’s a deadly virus on your computer. But you don’t need to worry. If you allow him to access your computer remotely, he can fix the problem in a few minutes. DON’T DO IT!!!!!!!!!!!!!!

The aim is to get remote access to your computer and then steal your information, including passwords, bank details, address and much more. They can also use your computer for illegal activities including spreading viruses. If you seriously have a problem with your computer, ring your internet service provider. They can usually walk you through the problem. They may need to ask for remote access but this time it’s safe as they work for your provider and you rang them. Remember that you can always change passwords after this is done, for safer security.

Multi-Level Marketing (MLM). Is it a scam? Decide for yourself.

I’m sure people have heard of Amway (also called Quixtar), Herbalife and many other MLM businesses. Some regard them as jobs, others consider themselves as entrepreneurs running their own business. However, the concept is the same in most of these businesses.

I’m going to use Amway as an example as I did spent time involved in this MLM around 30 years ago when it was much smaller than today. The basic premise is that you get invited to join this “whizz bang, great new business opportunity (biz-opp).” Because that person is most likely a friend, family member, work colleague or somebody you know, you’ll feel like you should check it out at the very least. So you both attend a “meeting” in a person’s home. Someone does a presentation on a whiteboard, showing you how you can make money if you do the various things he talks about.

These things include:

  • Buying and using the company’s products yourself.
  • Trying to sell these products to family, friends, work colleagues and nearly everybody you know.
  • Explaining it to people who are interested but inviting them to a meeting for a better explanation. Some will get involved and some won’t.

The way it works is that Joe makes money by selling products to Julie, Mitch and Mike. Mitch just wants to buy the products for his own use (at wholesale prices). Mike and Julie ask how they can get involved so you take them to a “meeting.” Mike likes the idea of getting others involved but Julie prefers to just buy and sell.

Everything works on commission. If you sell products to people beneath you, you make some commission. The person who introduced you to the business makes money whenever you or anybody in your group sell products. The more that get involved, the more money there is to be made.

Is it a scam? Is it a pyramid scheme? You decide!

Pyramid schemes.

You find a business that sounds appealing and all you have to do is sign up other people under you. Once you join, you’ll quickly learn that you have to recruit all your friends, family and work colleagues and then get them to do the same. It’s called a pyramid because the money flows upwards and you’ll generally never make much money because you’re not high enough on the proverbial totem pole. Also these schemes are illegal.

Anyone in a MLM or pyramid scheme will say that their business IS legal and is working well. Just because a business is legal, that doesn’t automatically rule it out as being a scam. There are loads of legal scams.

Email scams.  

These can be nasty. You receive an email supposedly from your bank, from PayPal or your ISP. It states that your records need to be updated. Just click on the link, download a form and then fill it out.

If you click the link, many things may happen. It can infect your computer and/or gain remote access. The scammer can plant a key logger program that copies every keystroke you make. They can learn more about you from that and steal your personal information.

How to identify such emails as scams is usually easy and there are a few ways to do it.

First have a look at the email address. It could say joey34@ nAB1.me  That email is not an accurate one from the National Australia Bank.

For those who use PayPal, the same thing applies. The email address could be Mark Smith@paapl.com. PayPal would never send an email from such a stupid address.

The next thing to check is how it’s addressed. If it doesn’t use your name, it’s a scam. Official emails would always use your full name. Official emails would NEVER ask you to click any links in the email. They would ask you to log in normally and do what they ask.

If the English in the email is very poor, it’s another example of a foreign scammer at work.

Surveys.

There are hundreds of sites asking you to complete surveys on a regular basis and you’ll earn some easy money. Once you sign up, you’ll see that you won’t “qualify” for many surveys. If you do and then complete the surveys, you accrue a small number of points. IF you happen to get enough surveys done to accrue the target number of points, you can convert them to credits in a company’s online store or you may be able to get a voucher for certain stores.

Amongst the hundreds of bad survey sites, there are a small number of good ones. I can personally vouch for Your Voice surveys (an Australian) site as I have received a few discount vouchers and payments into my PayPal account over the last few years. It seems to take 1-2 months to get rewarded but I don’t mind. It’s a little extra spending money now and then.

Dead unknown relatives. (Nigeria)

If I was to believe all the emails I have received, I would be a billionaire and I would have buried hundreds of “foreign relatives from many strange countries.”

NEVER reply to these emails. They’ll ask you to pay a fee to release the money and then they take that money and run. These emails most commonly come from Nigeria but also do come from other, mainly Third World, countries.

Ponzi schemes.

Wikipedia’s explanation of a Ponzi scheme.

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.

Ponzi schemes occasionally begin as legitimate businesses, until the business fails to achieve the returns expected. The business becomes a Ponzi scheme if it then continues under fraudulent terms. Whatever the initial situation, the perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920.  The idea, present in novels (for example, Charles Dickens‘ 1844 novel Martin Chuzzlewit and 1857 novel Little Dorrit each described such a scheme), was actually performed in real life by Ponzi who with his operation took in so much money that it was the first to become known throughout the United States. Ponzi’s original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors’ money to make payments to earlier investors and himself.

Typically, extraordinary returns are promised on the original investment and vague verbal constructions such as “hedge futures trading“, “high-yield investment programs“, or “offshore investment” might be used. The promoter sells shares to investors by taking advantage of a lack of investor knowledge or competence, or using claims of a proprietary investment strategy which must be kept secret to ensure a competitive edge.

Ponzi schemes sometimes commence operations as legitimate investment vehicles, such as hedge funds. For example, a hedge fund can degenerate into a Ponzi scheme if it unexpectedly loses money (or simply fails to legitimately earn the returns promised and/or thought to be expected) and if the promoters, instead of admitting their failure to meet expectations, fabricate false returns and (if necessary) produce fraudulent audit reports.

The following two scams came from somebody in a forum I belong to.

Selling cheap military vehicles.

In the US and possibly other places, there’s a used car buying scam on Craigslist and probably other sites. Supposedly, Russian gangsters are behind it. Nice cars or trucks are offered at a very low price because the seller is in the military. Car will be shipped to the buyer through the Military’s system. I think the buyer pays ahead through PayPal, and the vehicle is never delivered. It plays off some things that are semi-truthful.

US Military members do get a little discount on car purchases. I think they do ship cars for free when the soldier is assigned to another base (if so, I’m pretty sure it would be from one base to another and personal use only.)

Hotel bookings.

In the hotel industry there’s a scam whereby, through email, somebody tries to reserve several rooms for a week or two. They try to pay ahead and then cancel the reservation and want a refund on whatever they’ve paid. I’m guessing they would pay with fraudulent methods and want the refund put in their bank or credit card. I don’t know- we don’t collect until check in and never take credit card numbers by email.

The 10 greatest get rich quick schemes of all time.

This site has some amazing scams.

Here is another link to a site that talks about scams.

Do your due diligence!

If something looks too good to be true, it’s highly likely that it’s not true and is a scam of some sort. Never do anything that seems out of the ordinary without checking its credibility. There are lots of scams around, most are listed in Google. You just have to type it in and you’ll get a LOT of information to help you make your choice.

If this article helps just one person, it’s well worth my time putting it together.

If you want opinions on whether something is a scam or not, contact me and ask.

Good luck to all.

Thanks for reading.

Laurence.

 

Posted by Laurence on September 2, 2015 at 13:01