If it sounds too good to be true, it probably is - how often have you heard that great bit of advice? Unfortunately, it's not always easy to tell if you're being taken for a ride or if you really are being smart and getting a deal. Financial scammers have gotten savvier and more aggressive in their pursuit of your money and identity. So what should you look for when you think you're getting a deal, but aren't sure if it's really a rip-off? Here are seven red flags of a financial scam, so you can avoid them. (Don't make yourself a target - steer clear of these attention-grabbing tax-filing practices. Check out Avoid An Audit: 6 "Red Flags" You Should Know.)

IN PICTURES: What Is Your Risk Tolerance?

  1. Email From Someone You Don't Know
    We all get our share of spam, those unwanted solicitations via email that software filters neatly away from your other message. There are those emails that slip through - you've likely heard of the Nigerian email scam that asks you to deposit money to an overseas account. Ignore email if you don't recognize the sender, particularly if there's an attachment that could send a virus to your computer. If a bank or business contacts you for some reason but you feel something's off, trust your gut. Don't reply to the email or click on any link - just visit the bank or business website to see if there's anything that requires your attention.

  2. Callers Asking For Personal Information
    It's in our nature to take information at face value, so if someone calls saying he or she is with XYZ Bank, it must be true, right? You can even hear the call center in the background. Don't assume the person calling is being truthful, particularly if this person is asking you for information like account numbers or passwords. Politely end the conversation, and call your bank. When in doubt, go to the source.

  3. You Have To Pay To Apply
    Guaranteed approval for your loan! Sounds too good to be true, right? Here's how this scam works: a telemarketer will tell you that for a fee ranging from $25 to several hundred dollars to apply for a loan or credit card. Customers are told they get this fee back, but they don't - it's all a scam. This scheme preys on people enduring financial hard times, making it particularly successful in dire economic times.

    Another scheme like this one is the scholarship scam, where a company or advertisement promises to find you scholarships for a fee - free money for college! Scholarships searches and credit repair are things you can accomplish on your own for free. These services are scams.

IN PICTURES: 8 Signs Of A Doomed Stock

  1. Promises To Fix Credit Problems
    Bankruptcy or bad credit is a tough road, and those who find themselves with low credit scores are lured by easy fixes - like the credit repair companies. These companies promise to dispute any false things on your credit report, which is something you can do for free. Some credit repair companies even suggest people with bad credit get an EIN (Employee Identification Number - like a social security number), which is actually against the law. While there are legitimate companies that do offer credit repair help, make sure that you perform the necessary research prior to getting involved.

  2. No Value, No Product
    Work from home, make thousands a week! It sounds so good, you're thinking of calling after another bad day at work, right? These promises are hollow, and the scams often have you recruit more people to post ads, and so on - a pyramid scheme. If an advertisement is vague about the work, and sounds like they're selling you something, it's probably a scam. (Considering joining an "investment club" that promises phenomenal returns on your sign-up fee? Read this article and think again! What Is A Pyramid Scheme?)

  3. No License
    There's this smooth salesperson, maybe it's even someone you know personally, who is trying to sell you insurance or investments. It sounds really good. He or she promises high returns, low risk. But is this salesperson licensed? Ask - some of the biggest scams right now involve sales of unlicensed securities by unlicensed sales people. If there's no license, avoid the deal.

The Bottom Line
These are just a few of scams out there today, designed to steal your money. If you have elderly family members or friends, talk to them about these schemes - many scammers prey on the elderly, since they often have sizable retirement savings, and are deemed more vulnerable. Protect your identity, and don't be afraid to say no if something seems off. Trust your gut - it will tell you if something is too good to be true, like the old saying goes. (For additional reading, see 7 Signs Of A Charitable Disaster Scam.)

Find out what happened in financial news this week. Read Water Cooler Finance: G20 Leader Spats And China Fakes It.

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