3 Sneaky Scams I Fell For (and How You Can Avoid Them)

by Allison Martin · 7 comments

If you read or watch the news, you’ve likely noticed one scary thing: fraud is on the rise and perpetrators aren’t cutting victims any slack. This is even more evident as the holiday season gets closer, as consumers are trying to avoid the crazy shopping malls and opt to order gifts online instead.

This is beyond bad news for anyone who is inexperienced with financial issues, or don’t protect themselves when listing payment information online. But how about those of us who do take precautions, and are well seasoned in money matters? Unfortunately, criminals have a way of retrieving information and wreaking havoc on anyone’s wallet and possibly, credit profile.

And on the other side of the fence are companies that will do anything to make a buck, so they convince you to “invest” in your future by joining them. In essence though, you’re actually making their pockets fatter and will inevitably receive the short end of the stick.

Here are some scams that took me on a wild ride, and how you can protect yourself from falling victim to them:

1. Multi-Level Marketing Schemes

To avoid throwing any particular company under the bus, let’s just say the MLM I was tricked into joining specializes in knives. It was ten years ago when I saw the flyer for a student employment position with exponential earning potential. So I did exactly what any young student who desperately needed income would do: I called the number, and they invited me in for an interview the following day.

As with most MLM schemes, I was hired on the spot and asked for an initial deposit of $135 to get started. After two days of training, and a few presentations that went south, I decided to throw in the towel. And much to my surprise, the paycheck I received was substantially less than what I was promised. To make matters worse, they were unavailable to discuss why I hadn’t been paid properly.

Moral of the story: if it requires a monetary investment up-front, and the company has a less than stellar track record, you want to avoid them. I have heard of legitimate companies, such as Mary Kay, that follow this same setup and some representatives make a handsome living. But they have a well-established reputation, and the money you spend is for starter kits and equipment, not random service fees. At any rate, proceed with caution.

2. Natural Disaster Relief Fund

Do you recall the devastating earthquake that rocked Port Au Prince, Haiti several years ago? The news footage was devastating and I couldn’t help but want to lend a hand to all those who had lost loved ones, or were stranded with nowhere to go. And of course, disaster relief funds were popping up out of the woodworks, so I picked one that seemed legit and made a monetary contribution.

A week later, a new station did a story on the “agencies” to avoid, and the one I donated to was on the list. It was a group of scam artists who collected identifying information and having a field day with donor’s funds. What a shame!

Fortunately, I learned my lesson, so here’s my tip for you: do your homework before donating to any type of relief fund. And like the MLM schemes advice, make sure the company has a solid reputation. There are tons of criminals out there looking to capitalize on other’s misfortunes.

3. The Vacation of a Lifetime

We all want to unwind on occasion but, depending on the destination and time of the year, getaways can be a bit pricey. So why not travel on someone else’s dime?

Several years ago, my husband I were invited to attend a seminar hosted by a travel agency in return for two domestic round trip tickets to the location of our choice. It ended up being a 2-hour timeshare presentation, and our sales representative was so pushy that I felt like I was suffocating each time he uttered a word.

We didn’t make the purchase, but we did walk out with the “free” ticket vouchers. But when it was time to make reservations, there was a non-refundable booking fee, and so many restrictions that the cost of the free flights outweighed the benefits. It was practically impossible to book a flight without paying an “upgrade” fee (something else we weren’t warned about beforehand). The travel agency went under within a year and we never took that trip — at least not at their expense.

My advice: again, research the company making the offer before you sign up. Confirm the website is legit, call the company’s direct line, read all about their past dealings, peruse reviews, and most importantly, never share credit card information on an unsolicited phone call.

Have you fallen for any of these scams? What’s another sneaky scam we should add to the list. Share your experience!

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{ read the comments below or add one }

  • Lisa says:

    Legitimate travel agencies don’t hawk timeshares.

  • Kate says:

    Give your “national disaster” contributions to the Salvation Army. And remember the old and true adage: “IF IT SEEMS TOO GOOD TO BE TRUE — IT IS.” The only scheme I contribute to is the Lottery. I have played for 16 years and won no more than $100…but heck, it’s only $1 a week and hey, you never know.

  • Ken says:

    The knife “scam” you mentioned a) isn’t MLM, b) doesn’t require a deposit (and hasn’t in years), and c) has been in business 60+ years (more than your reputed mary kay) with an A+ BBB rating (same as mary kay).

    How do you blog/use a computer if you don’t deal with companies younger than 60? Maybe that’s why it was hard to look up facts. Conjecture is easier.

    I used to work there and have had peers say the same thing. The same was true of each and every single person: calling it a scam is code for “I refuse to work hard enough to make a living in sales.” They wanted everything handed to them and weren’t willing to take initiative to earn it. You get paid what you’re worth. That’s tough for lazy people to take. They’re their own scam and don’t like that reality reflected back on them. Cognitive dissonance and all.

    I am sorry you had a bad experience and lost your deposit, though.

    • Nate says:

      Agreed. I sold knives for this company for a few months back in the day, and to call it a scam and an MLM is false on both counts. I can also verify that they stopped asking for deposits (which were refundable, btw) about a decade ago. The fact that the author started off with something so patently false caused me to disregard the rest of the article.

      • Allison Martin says:

        To clarify, I worked for this company many years (more than 10) ago. Perhaps things have changed, but the experienced I outlined above is indeed factual.

        • Nate says:

          I worked for them 11 years ago, the same timeframe you reference in the article and in your comment. Then as now, the company paid a commission based on what a person sold, and that commission increased based on how much was sold. That is not the same as MLM where you’re expected to set up a “downline” in order to make any sizable amount of money. If you wrote about how they “hire” just about every applicant regardless of their likelihood to succeed and fill their heads with unrealistic expectations of grand success, how the knives are overpriced, or how salespeople are encouraged to sell to family members who only buy because they feel pressured to, I would agree with you. I’m by no means a fanboy of this company, but calling them an MLM is false and the deposits have always been refundable.

  • Emily @ Simple Cheap Mom says:

    That natural disaster relief fund scam is terrible. It’s harder in that case to figure out if something is legitimate too because so many would pop up to deal with the disaster.

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