Finance scams are the most dangerous breed of scams that make people do things they should not. They rob you of the money that you have earned with hard work and effort. At the same time, you usually have no way to catch these money grabbers when they have damaged you financially. However, if you know a thing or two about them, you can thwart their evil actions and make them fail miserably in trying to rob you of your money. That’s what this finance scam guide is for. So, read this complete and you will hopefully never fall for a finance scam every in your life.
The Many Types of Finance Scams
The first thing that you have to know is the many types of scams that exist on the internet and around you. Once you know these scams, you will be able to identify them before they damage you in any way.
· Online Trading Scams
In this type of finance scam, you will be made to spend your money on something that seems benefitting to you. For example, you will be lured into spending money on online trading. What you realize later is that the entity that made you sign up online does not exist or is nothing but a fake. These scams are more common today than they were a few years ago. The inception of cryptocurrencies has given rise to these scams more than ever. You will often hear the pitch that you can sign up with an online broker and make money by trading cryptocurrencies. While there is nothing wrong with trading digital coins and making money off them, but that’s requires effort and prediction.
On the other hand, these online trading platforms tell you that you just need to sign up with them and then the trading platform will do the magic for you. You will put it on autopilot mode and see the money coming in your account. Moreover, they tell you that you can make thousands of dollars in just one day through their trading softwares. At the end, they tell you that within the new few months, you will be a millionaire. These are all lies. When signing up with an online broker, you should see their regulation information. If they are not regulated, keep away from them. Not to mention, a professional and legitimate online broker will never say something that sounds like a “claim.”
· The Lottery Scam
If you are over the age of 50, you are highly prone to this type of scam. People in the past were interested in lotteries more than anything else. That was the way for them to make money while sitting in their homes. If their jackpot hit, they became filthy rich. However, these elderly people have been fooled and made fun of by scammers for many years now. These scammers call the old people and tell them that they have won a lottery. They then make them spend some money in the name of a processing fee or something similar. As soon as the victim pays the money, the scammer disappears and is never found again because the victim does not have any records on him/her.
· The Debt Consolidation Scam
Once you know about debt consolidation, you will never fall for this scam. A lot of people become a prey to these scammers because they don’t fully understand the idea of debt consolidation. They think that a company can lower their debts and help them pay those debts with ease. That’s not the case. Debt consolidation is exactly what its name says. With this service, many different debts are merged into one so you have to pay only one payment that goes to all your creditors. The debt consolidation company charges you a fee for this service. However, your debts never become smaller than they already are.
If you see an online company that claims to help you with your debt repayment by lowering your debts, you should stay away from them. They might even say that they will talk to your creditors and ask them to lower your debts, but that’s not true. A debt consolidation company will only make your debts easier by helping you pay only one debt repayment every month rather than paying many.
· Mortgage Loan Scam
The hardest stage of buying a house is getting pre-approved to get a loan. For that, you have to provide proofs of your income and all the information about your expenses. The lender wants to make sure that you will be able to afford the mortgage payments every month. For this, they have to know your income and expenses on a monthly basis. Your mortgage payment should be around 25% of the gross income you make every month. In addition to that, you have to have a good credit score as well. If you have not been at your best for repaying loans in the past, you will have a hard time getting one again.
However, there are many scamming companies online that tell you that you can sign up and get pre-approved for a mortgage loan by simply filling out an online application. They will go to the extent of telling you that you do not even need a good credit score to qualify for the loan. That’s not true at all. If a company says this, they are about to scam you. If they don’t want to know your credit score, they are just bluffing. Provide them with your personal details and they will screw you in the worst possible manner.
· Payday Loan Scam
One should not fall for this scam, but that’s just something you expect in an ideal world. You will be surprised to know that thousands of people fall for this ridiculous scam every month. They are made to think that they got a loan from a company in the past. Even though these people know they had not taken out any loans, they still say things out of fear that they should not. So, what happens is that you receive a call from someone. This person claims to be an attorney or law enforcement official calling you on behalf of some company that you got the loan from.
Even though you have not taken out a loan, you get scared because the person on the phone is very intimidating. They usually scare you by saying that they will send police to your door if you do not repay the loan you have taken. The innocent people fall for this scam and pay the money. They just do not want police to be on their doorstep or end up in the court fighting a lawsuit from someone.
How Do You Become a Victim?
Of course, one has to wonder how the scammers got my number or email address. Why did they pick me out of billions and billions of people in the world? Well, there are many factors that come into play before you or someone else becomes the victim of an online finance scam. Let’s take a look at what transpires.
· You Clicked on a Suspicious Link
You have to be very careful with the emails you open. If you ever visit the spam folder in your emails, you will find hundreds and hundreds of email arriving every single day. These emails come from a variety of sources. However, it has to be mentioned here that some of them sound pretty convincing. So, based on the subject line and the matter of the email, you might forget for a second that you are not supposed to click on those emails – and that’s why they are there in the spam folder in the first place. You click on the email and then you click on the link that’s in the email.
That’s when you have handed over a lot of control to the spammers and scammers. Your personal details get forwarded to various hackers and then they start calling you with various disguises to make you shell out the money you have earned with a lot of hard work over the years. In some cases, you click on an email that tells you that you can qualify for a loan for free. You fill out the complete application on the website without realizing that there is no company providing you with that loan. These are some scammers who are collecting your information to scam you later with some new tactic.
· You Filled out an Online Application for a Loan
There is nothing wrong with filling out an application to get approved for a loan. However, you have to be very careful with the companies that you choose for applying for the loan. It is recommended that you go with only the well-known and famous companies that you keep hearing about from the people around you. If you are picking a new company, you should spend some time researching the company to know its legitimacy before you fill out an application. And do not think that you are just filling the application and doing so will not harm you. The damage starts as soon as you start entering your personal information in the online application.
Now, the problem here is that many times, you are not dealing with a loan company or lender in the first place. You are dealing with a lead generation website. This website collects information from its visitors and then forwards that information to other lending companies. There is nothing wrong with that practice, but what’s wrong is that these same lead generators can forward your information to some unknown parties, also known as scammers. That’s when you start receiving calls from people who speak English with an accent and tell you that you owe them money.
· Your Information Was Leaked Unintentionally
And then there are times when it is no one’s fault that your information gets stolen. Almost all the companies that now handle customer information have a variety of security tools in place to stop hackers from attacking their servers and networks. However, you must not forget that hackers are always evolving. They keep coming up with new methods to sabotage the systems of these companies only to steal the information of the customers. Once they have successfully entered the system of a company that has your data stored on its servers, your information will travel to far places.
You will be surprised to know that people have their credit cards information being sold on the internet. Sometimes, you can land on these websites with a casual Google search. They sell your credit card information by calling it dump. They sell credit card numbers in the form of bundles to people who are interested in buying them. This accident has happened to the best companies of the world. You can’t forget how Facebook’s datacenters and customer information has been compromised a dozen times in the past. And since there are more Facebook users in the world than any other social media users, a breach in Facebook’s database means a compromise on millions and millions of customer records.
Signs That You Are Being Scammed
In some cases, you don’t instantly know that you are being scammed. However, there are certain signs that will tell you that you are about to lose your money. Let’s take a look at those signs so you can avoid a danger before it is too late.
· Things Sound Too Good to Be True
In most finance scams, you will detect this sign in some way. When they want money from you, they always lure you into something that you see as your benefit. For example, they will tell you that you have to spend very little money to get a lot of money. Take the example of online Bitcoin scams. They ask you to sign up on their softwares. The software is supposed to make trading easy for you by working on your behalf. It makes you money by entering and exiting trades while you are sleeping. However, before you can use the software, you have to deposit at least $250 in your account.
The software owner, who claims that his/her software can make you millions, is never able to justify why they need money from you. However, when they ask you to deposit money in your trading account, you should quit the idea of joining the platform in the first place. If someone tells you on the phone that you have won a lottery despite the fact that you never bought a lottery ticket, you can be sure that you are about to be scammed. Anything that sounds too good to be true is too good to be true in its truest sense.
· The Situation Is Irrational
In many cases, you are being scammed by people who think you are foolish enough to believe anything they will say. And that’s why they create a situation that does not make sense at all. Again, you can take the example of a lottery win. If you never bought a lottery ticket, how can you win the lottery? They can’t tell you that you were randomly picked by some computer program. You have to understand that a lottery can only be won when you buy a ticket, and choose a combination of numbers which then matches the numbers that are drawn by a machine. How can you win the lottery when you never picked any numbers?
It is as though someone is telling you that you to meet them in their home without telling you their address. Can you do that? With a finance scam, you will see the signs in other forms. For example, you will be told that you can get a loan to buy your dream home without any credit check. That’s just impossible. There is no one in the world who would give you hundreds of thousands of dollars without taking any guaranty from you that you will return their money. If they are so angelic that they want to help you, why are they giving you a loan in the first place? Why not just approach you in the way and give you a bag full of cash?
· You Are Being Intimidated
This is something that’s happening a lot in the recent finance scams. A finance scam that is perpetrated by impatient beings looks something like this. They pressure you into giving money to them. They use just about every scare tactic that exists in this world to scare you and make you shell out the money out of fear. They tell you that they are sending police at your home. At other times, they will represent themselves as lawyers and threaten you that they will pull you in the court for not repaying their loan. You know what’s funny in this situation? You have not taken out a loan ever.
How can someone make you repay something that you never got from them? The situation is implausible but the person on the phone is constantly trying to convince you that you have to return the money.
Ways to Save Yourself from a Finance Scam
Here are some methods that are clichéd and simple, but they are most effective in keeping you from falling to a finance scam.
· Don’t Click on Unknown Links
That’s the 101 of being safe on the internet. When you check your emails, make sure you check the name and email of the sender. After that, you should look at the content of the email. If the email is from someone you know and they have sent you a link, ask them by calling them if the link was intended. If you have received an email from a stranger with a link, just do not click on the link – it is as simple as that.
· Don’t Fill Out Online Applications for Loans Blindly
There is nothing wrong with filling out applications to get approved for a loan for your house or car. However, you have to be sure that the company that you are sending the application is a legitimate one. You can use online customer and expert reviews to know about the best and most reliable companies that provide people with loans. Don’t fall for unknown websites that claim that you can get the loan even if you do not have a good credit score.
· Don’t Believe Everything You See Online
Do not believe everything you see online. You will receive a lot of requests in emails from unknown people to click on links or try their softwares. In addition to that, there are many online softwares that claim to be the best trading platforms to make you money. They show you pictures to take you into the world of fantasies. Don’t fall for their words.
· Keep in Touch with Your Creditors
Keep in touch with your bank, lender, and other financial institutions that you have had business with in the past. Keep looking at your bank statements and call the bank to ask about any suspicious transactions that appear no your bank statement. In addition to that, if you are offered some credit solution to solve your current financial problems, verify it as much as you can to know the authenticity.
Living in this modern world without losing money to scams is not easy. However, this same century is also called the era of information. You have all the information you need about online scams to keep yourself safe from any finance scam. This guide has been put together for your benefit. Read everything that you need to know about finance scams and frauds before you shell out your money to a company that is not what it claims to be. Be very observant on the internet before you do any financial transactions. Do not click on unknown links and if you receive any emails from financial institutions about opportunities of investing money, make sure you check the sender’s email address.