When it comes to these cons, the best offense is a smart defense. Educate yourself about current scams and how to recognize them. It's usually much easier to walk away from an opportunity that sounds too good to be true than it is to recover your money once you've lost it. To that end, this slideshow summarizes the most common scams, and provides links so you can learn more about them.
Beware These Consumer Scams
Spotting Financial Scammers: A Guide to Common Cons
Last year, identity theft accounted for one-fifth of all complaints to the Consumer Sentinel Network, making it the most common consumer fraud in America. According to the FBI, identity thieves use consumers' personal data -- birth date, Social Security number, name, bank account information, etc. -- to conduct other illegal activities, such as credit card or mortgage fraud. Learn more here.
Telemarketing fraud encompasses a range of scams designed to convince you to part with your money. An unknown caller tells you you've won a prize, or a vacation, or the lottery, or that there's a check for you that must be delivered by courier. Bottom line: Don't give money to anyone unless you can confirm their identity. And if the idea of winning a contest you didn't enter sounds strange or a little crazy -- that's because it is. Learn more here.
In the wake of the real estate market's collapse, scammers are posing as lawyers offering distressed homeowners "assistance" with getting a loan modification in exchange for a fee. The nonprofit, nonpartisan Lawyers' Committee for Civil Rights Under Law advises struggling homeowners to steer clear of costly lawyers and instead use a free or low-cost, HUD-approved housing counselor. It provides a free, searchable database you can use to find one in your state. Learn more about other housing-related scams here.
According to the Federal Trade Commission, "scammers come up with all kinds of convincing stories to get your money. And many of them involve you wiring money through companies like Western Union and MoneyGram. Why do scammers insist that people use money transfers? Because it’s like sending cash: the scammers get the money quickly, and you can’t get it back." Learn more about these scams, and how to avoid them, here.
There aren't quite as many credit card scams as there are different credit cards, but sometimes it feels like it. Ranging from debt consolidation cons to selling your debt outright to identity theft, the list is varied and complicated, but you can take some concrete steps to protect yourself.
According to the FBI, Nigerian letter frauds offer the recipient "the 'opportunity' to share in a percentage of millions of dollars that the author -- a self-proclaimed government official -- is trying to transfer illegally out of Nigeria ... The scheme relies on convincing a willing victim, who has demonstrated a 'propensity for larceny' by responding to the invitation, to send money to the author of the letter in Nigeria in several installments of increasing amounts for a variety of reasons." Learn more here.
According to the federal government, "deceptive pitches for investments often misrepresent or leave out facts in order to promote fantastic profits with little risk. No investment is risk-free and a high rate of return means greater risk. Before investing, get written information such as a prospectus or annual report." Click here for tips on identifying potential scammers and here to get more information from the FBI about internet scams.
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Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at firstname.lastname@example.org, on Twitter at @LorenBerlin, and on Facebook.