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Wealth Building Scams

People are always on the lookout for an easy way to make money. It's just human nature. Everyone is feeling the effects of a slow economy and rising food and gas prices. The scam artists are counting on this when they try to lure people with their glitzy schemes of how to make a lot of money with little or no effort.

Investment scams are everywhere. They advertise in the classifieds and via the internet. You may have received emails from individuals claiming to need your assistance in transferring money from one country to another or some other bogus idea. Don't believe it! Be alert to these fraudulent hucksters and protect yourself and your money.

Following are some of the most common scams circulating today:

1. The Seminar Pitch - You usually find out about this "opportunity" from a letter or an infomercial. You are invited to attend a seminar or conference which promises to show you how to make a lot of money. The purpose is to give you valuable information on how to make wise investments or run a profitable business. Most people who invest in these opportunities discover that the profits are nowhere near to what was promised- and then there is no way to recover their money.

What can you do to protect yourself? First of all, take your time before signing any contract or paying any money. Recognize the high-pressure sales pitch for what it is- an attempt to get your money before you have a chance to properly evaluate the opportunity. Thoroughly investigate the company. Don't believe all the success stories you hear at the seminar. Many times, scam artists hire people to tell their stories- it's all entirely made-up! Always be cautious when a company is reluctant to answer your questions. A legitimate business will always give you written information concerning the investment and openly respond to your questions. Make sure that you know how much money you will need to invest in this opportunity. This number should be stated in writing.

2. The "Nigerian" Scam - This scam usually arrives as an email. These people claim to be everyone from a foreign government official to deposed royalty. But the end game is always the same. They ask for your help in transferring millions of dollars into your bank account- for a small fee, of course.

You would think that common sense would prevail in this situation, but some individuals have actually been duped by this scam. Ask yourself some questions- why would a stranger pick you, also a stranger, to handle all of that cash? And more importantly, why would you ever give your personal and banking information to someone you don't know?

If you ever receive an email from someone wanting help transferring money from Nigeria or any other country, forward it to the FTC at spam@uce.gov . If an offer comes through the mail, contact the FTC toll free at 1-877-FTC-HELP (382-4357).

If you have lost money in a scam such as this, contact your local Secret Service field office.

3. Foreign Lotteries - In this scheme, scam artists convince individuals to buy chances in big-payoff foreign lotteries. But first, you have to send money to cover insurance, taxes, and customs fees. This amount usually starts small, but keeps increasing the longer you stay with it. These scam operators normally don't even buy any lottery tickets. Many times, they gain access to the person's bank account or credit card information and run up illegal charges.

What should you do? The easiest thing you can do is just ignore any solicitations of this type. They are all phony and not legitimate. If you receive foreign lottery material through the mail, give it your local postmaster. Always keep your bank account numbers and credit card information private!

4. Check Overpayment Scams - If you are considering selling a car or other valuable items through an online auction or the classifieds, be alert to this scam which targets people doing just that. How does it work? You will get a response to your ad and the scammer will offer to buy the item using a cashier's check, corporate check or personal check. At the very last moment, the "buyer" gives you a check for more than the agreed upon amount. He casually asks if you will wire him the difference once you have deposited the check.

There's no big surprise here, really. You wire the difference, the check bounces, and you are liable for the full amount. You should know that these checks are counterfeit- and good enough to fool most bank personnel.

How can you protect yourself from this scam? Here are some smart suggestions:

  • Know who you are dealing with. Always get a name, address and telephone number from the buyer. Independently confirm that they are who they say they are.
  • Never accept a check for more than the selling price. Never!
  • If you accept a check as payment, ask for a check drawn on a local bank which you know. Visit the bank to verify that the check is valid.
  • Consider using a reputable online payment service. It's safe for everyone involved.