6 Red Flags Of A Financial Scam

AAA

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.

Email From Someone You Don't Know

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, 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.

Callers Asking For Personal Information

If someone calls saying he or she is with XYZ Bank, it must be true, right? 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.

Guaranteed Approval For Your Loan

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. Another scheme like this one is the scholarship scam, where a company or advertisement promises to find you scholarships for a fee. Scholarships searches and credit repair are things you can accomplish on your own for free. Don't be fooled!

Promises To Fix Credit Problems

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.

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.

No Sales 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.
  1. No results found.
Related Articles
  1. Investing

    Protecting The Elderly From Scams

    Here are some of the more common scams aimed at seniors and tips on how to avoid these frauds.
  2. Insights

    Recognize And Avoid "Work At Home" Scams

    From pyramid schemes to envelope stuffing, there are a lot of scams masquerading as legitimate part-time work.
  3. Insights

    How to Avoid the Top Financial Advisor Scams

    Investors need to be wary of financial advisor scams. Here are the most common and how you can protected yourself.
  4. Small Business

    Stop Scams In Their Tracks

    Find out how to protect yourself and your loved ones from financial fraudsters.
  5. Investing

    How T-Mobile's Protecting Customers From Scams

    As smartphones have become increasingly central to how people communicate, they have also become an increasing popular channel for scammers. Phone scams have become so common in part because ...
  6. Personal Finance

    6 New Credit Scams To Watch Out For

    It seems that everyone has their hand in your pocket these days. Learn how to protect yourself against these financial scams.
  7. Financial Advisor

    How Advisors Can Help Clients Spot Elder Scams

    Financial crimes against the elderly are on the upswing. Here's what financial advisors can do to help protect their most vulnerable clients.
  8. Trading

    Spotting A Forex Scam

    Forex scams are more common than you think. We tell you how to spot them.
  9. Investing

    How To Avoid Becoming A Fraud Victim

    Be aware of your rights as a consumer, and know how scammers work so you can protect your money.
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an ...
  2. Salvage Value

    The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting ...
  3. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  4. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center