5 Financial Schemes Used to Fool You

by Guest Contributor · 1 comment

Fraudsters are a clever bunch, so a discerning eye is a must for avoiding most financial fraud schemes. Confusing terms and conditions lead many consumers to believe they’re doing something beneficial, when they’re actually feeding into one of many schemes that con artists have planned out ahead of time.

If you’re trying to find ways to prevent credit card fraud, or keep your finances safe from financial schemes, then read on. We’ve listed some of the top schemes to watch out for.

Advanced Memberships

One of the many types of money schemes floating around is called an advanced membership. This is when you purchase a discounted membership to a company that hasn’t yet opened. While this can sometimes be legitimate, it’s usually a scam.

It’s better to spend a little bit more on a legitimate membership once a company opens their doors than to lose all of your initial investment if it’s a fake. For people who still want to take the chance, make sure to be very careful. Avoid companies you’ve never heard of, and research all companies online. This should help lower the risk of falling for any off-handed money schemes.

Personal Scams

Personal scams are often the hardest to handle. These involve people believing they’re helping out another person through a kind act, only to find out they’ve been taken for a ride. Often, a seemingly helpless person will call and beg for any type of help — even the smallest amount, to try and seem more honest and sincere. Some people will even pretend to be a family member to get financial resources from those who are unsuspecting.

The best way to avoid these types of financial fraud schemes is to verify who you’re speaking with by calling a known number or meeting up with the person whenever possible. Also, just because someone claims they need help from another part of the world doesn’t mean you can’t verify the truth. If someone is truly in need of help, they should have no problem going through any steps you require to verify that what they’re saying is accurate.

Fake Representations

Many people fall for financial fraud schemes after believing they’ve spoken to a representative of an organization they already deal with — such as a familiar business or government agency. These representations often require the person to pay a fine, or a fee, to avoid a problem with the organization.

These situations can easily be verified by simply calling the organization’s publicly-listed number. That way, you can ensure the person you’re speaking with is telling you the truth.

If you’ve been scammed like this recently, then make sure you check your credit score to ensure they haven’t tried to steal your identity. Any inaccuracies should be brought to the attention of both the credit bureaus and the local authorities.

Fine Print Fees

When you sign up for a new account with any business, there’s often paperwork. Make sure you carefully read through all of the forms before you sign anything. It’s common to see confusing terminology and wording that’s used to protect the business. But if you sign the paperwork without understanding, you may be in for a world of fees. Here are some of the more unusual fees that some businesses are trying to force onto consumers:

  • Fees for disputing a claim or a charge from the company
  • Fees for complaining to third parties about a bad experience with the company
  • Fees for missed appointments, even when proper notice is given or emergency circumstances arise

These fees are sometimes hidden in fine print, so if you need to take the paperwork home to read through it, just ask. If they won’t let you, then you may have just avoided falling victim to one of many types of money schemes.

Unmarked Prices

Going shopping can be an easy way to fall for financial schemes. Take unmarked prices, for instance. Someone could overspend on a simple unmarked item the clerk says is a dollar or two, since most consumers wouldn’t think twice about the little expense.

However, this can also be the case for larger purchases like cars. You don’t want to fall in love with a car before you know all the details, such as the selling price and options included with the vehicle. If your dream ride isn’t clearly marked on the lot, request to see the price and feature list before exploring further. That way, you have an idea of the price the dealer wants you to pay, instead of becoming so emotionally invested that you’ll overpay just to be able to drive it home.

Knowing what types of financial schemes are occurring can help you be more alert. If you believe you’ve fallen for some type of scam, you can monitor your credit report at places like freecreditreport.com, or simply get a free credit report at annualcreditreport.com to look for any inaccuracies. As long as you pay attention to what’s going on around you, you can protect yourself from becoming a victim.

Joy Mali is a staff writer on The Washington Times and Examiner. Her work is also published on Lifehack, Yahoo and other mainstream sites. She likes to share interesting tips to help people manage their personal finances & credit.

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{ 1 comment… read it below or add one }

Funda January 14, 2014 at 3:33 pm

That’s why it is better people are aware of the proper practice in credit financing. Credit cards interest rates are high especially for those whom they foresee as bad risk. It’s just the same if you apply for a business loan or a personal loan. If banks doubt your capacity to pay, they will charge higher interest if ever your loans get approved.

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