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?
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.
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
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.