Things I DIDN’T Learn in College: Part 2 – How to Recognize a Scam

by Ron Haynes

Colleges teach facts but rarely teach students real life skills. Colleges can teach you how to compute the interest rate on a series of cash flows but they rarely teach you to recognize bogus cash flows. Before you think you’re too savvy to fall for a scam, remember that everything from high school students to accomplished Ph D’s fall for scams every day. Everyone is at risk because scams play on a deeply held desire to make a ton of money in a short amount of time

So how do you recognize a scam? What causes some highly educated people to fall for scams?

[youtube]http://www.youtube.com/watch?v=fjArlmn5eHY&NR=1[/youtube]

The first step in recognizing a scam is if it sounds too good to be true, it is. What a tired old cliche! Let’s change it to “If it plays on your sense of laziness, run far away!” Get rich quick schemes play on our innate desire to make a quick buck without having to work for it and then live like the rich and famous by the end of next week. Folks, it isn’t going to happen. And THAT’S why even the highly educated fall victim.

[youtube]http://www.youtube.com/watch?v=rThcWvPrvyE&feature=related[/youtube]

Here are a list of GIANT RED FLAGS that characterize a scam:

If you’re notified that you won a lottery by email, it’s a scam. Think about it. Did you give them your email address when you penciled in all those little bubbles on the lotto card? Have you ever heard of anyone winning a huge lottery from a “randomly selected database of email addresses?”

If the prize promoter says he needs to collect a “processing fee” or an “advance on the taxes” in order for you to claim the prize, yep, it’s a scam. Don’t fall for it.

If anywhere in any literature you see the claims like “earn passive residual income”, “for only pennies a day”, “now you can generate huge sums of cash in just minutes” or “Get rich now!”, “Earn big bucks in minutes per day!” you can bet it’s a scam. A simple rule of thumb is if you see multiple dollar signs like “$$$”, you can be certain that a scam is at work.

If the “opportunity” is long on promises but short on details. Yes, that’s another clue.

If someone invites you to a meeting to hear about a “ground floor opportunity,” run.

If the email requests any personal information, bank information, credit card numbers, driver’s license number, mother’s maiden name or any other personal information, STOP. Ask yourself, “Why would someone need this information? What is the worst thing that could happen if I give up this information?” Then delete the email.

If you are contacted by a lawyer/son/daughter/widow/bank official/government employee representing a very wealthy person from another country (usually in Africa) who died in a plane crash/was poisoned/was killed in a coup and left behind millions of dollars that is held in trust/held by lawyers/in a secret bank account and they want you to help them get it and you get to keep a share . . . can we get a ding ding ding? Yep another scam.

If the return address on the email is from a free account, yet another scam clue.

Sometimes scams look legitimate. Con men will send ten thousand invoices for goods and services that were never delivered in the hopes that an overworked accounts payable clerk will pay it without question. Yes it does happen. Always make sure you use purchase orders and instruct any vendor or supplier of any good or service that no payment will be sent without that number on the invoice.

Do you notice a common theme? It all boils down to getting something for nothing (or next to nothing). I said it in another post, that

Make sure the sites you visit are trustworthy and that they have a privacy policy with regards to any information you give them. Many of these scams bought your name, email address, mailing address, and maybe even your phone number from someone. I wonder who?

Never buy anything from someone who sends you a spam email. This is like feeding a stray cat. You’ll never get rid of them.

Always remember: The “DELETE” button is your friend. Saying NO to “ground floor business opportunities” will save you big money. And always ask if this is a lazy way to make some quick cash. If the answer is yes, it’s a scam.

These scams and others are examined in detail at Consumer Fraud Reporting – Identify a Scam.


[tags]blog, scam, fraud, spam, email, scheme[/tags]

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 8 comments }

Rolly

Good tips. We all need to be more aware of these scams. It does make me laugh to hear stories in the news about businessmen and college profs that get scammed tho. What were they thinking?

Ron

@Rolly
They were thinking, “Hey, here’s my chance to score big and give a big raspberry to the head of my department as I hand him the keys to my office.”

Laziness and revenge. That’s what most people think when they fall for these scams. I saw it over and over in a scam I fell for once (never again!). What the top dogs used to motivate the underlings was laziness (you can get rich with a little work now and set up a “cash generating machine” for the rest of your life) and revenge (stick it to your dream-killing boss by quitting during the busy season).

Mike

The funny thing is how many of these that we see, Ron. The Internet seems to be a breeding ground for scams of all sorts. It makes me often wonder how many people must go for it. I suspect that we’d be amazed by the numbers who do.

Thanks for the good warnings!

Becky@FamilyandFinances

I can’t believe people fall for some of these things! The one I hadn’t ever heard of, though, was the “sending an invoice for goods not sent” scam. It doesn’t surprise me, though. I could see how it could work.
My mom likes to go on the internet, but isn’t extremely savvy about it. I hope I’ve warned her enough times about these kinds of scams that she won’t ever click on one!

Ron

@Mike
You’re right. I see so many of these things every single day in my inbox. I always ask myself “Who is nuts enough to fall for these things?”

@Becky
Yes, that one must be fantastically profitable. Small business owners usually don’t fall for it, but medium sized and even larger ones fall for it all the time. Their clerks are very overwhelmed and get frustrated to the point of just paying any invoice that looks reasonable. Imagine sending invoices to 25,000 businesses for $497.73 and only 1 percent came through. That’s over $124,000 for $10,000 in postage and some copying.

Clay Cummings

Part 2 Recognizing a Scam. I only wish more people would read this. Too many people try to find an easy way out of things, and end up falling for scams. Unfortunately, many people do not how to investigate for themselves, or just fall for the old “this really works, I just did it” trick. I often send the link you posted to people who forward these kind of emails to me, along with http://www.hoax-slayer.com/

Money making business opportunity

college teaches only the theories and hypothesis of the relevant subjects. But life is different from Mathematics and sciences. This site is a good teaching of life and real experiences you face.

Sharon

I’ve worked in accounts payable and have seen at least a hundred scams with unwanted invoices. Besides just being invoiced for imaginary deliveries, scam companies would call a store, get a person (taking down his/her name) to tell them what model of copier/fax/cash register was “right there next to you”. They would actually send paper/ink/toner/ribbon etc for that machine via UPS or Fedex. The catch was that they would send an invoice with HIGHLY inflated prices. It is difficult to fight because they would have proof of delivery (along with the other ten packages that were delivered that day) and a name of someone (usually a part-time worker) who “said they had authority to make a verbal order”. VERY, VERY ANNOYING.

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