The warmer weather offers fraudsters new opportunities to get people to part with their money or personal information.
Just because it's summer doesn't mean scammers are taking a break. In fact, there are several cons that surface during the warmer months. Here are five scams that are common in the summer and steps you can take to avoid them.
Disaster-relief scams. If the hurricane that's headed toward the North Carolina coast -- Hurricane Arthur -- does hit land and cause destruction, there's a good chance con artists will use it as an opportunity to take advantage of people. A variety of scams pop up after most major disasters, says Adam Levin, founder of Identity Theft 911 and Credit.com. For example, after Superstorm Sandy hit the East Coast in 2012, fraudulent charities and relief efforts surfaced along with several other cons aimed at taking advantage of disaster victims. If this summer's storm season does result in disasters, don't give to charities that spring up to deal with them. Instead, check CharityNavigator.org for a list of legitimate organizations that have experience providing disaster relief.
Travel scams. There are several travel-related scams, but two of the most common are free cruise and vacation rental scams, says Eva Velasquez, president and CEO of Identity Theft Resource Center. Victims of the cruise scam typically are contacted by phone, e-mail or text message and offered a free cruise that actually isn't free. People have to pay a variety of fees to book the cruise and, in the process, have to give up a lot of personal information -- which is then sold, Velasquez says. If you want to take a cruise, skip the free offers and, instead, follow these five steps to get a cruise deal.
With rental scams, con artists list properties that they don't own on Craigslist or other sites that don't vet posts. Then they take people's money and leave them without a place to stay, Velasquez says. If the person listing a vacation rental will only communicate by e-mail, won't show you the property in advance or asks you to wire money, she says it's likely a scam. For tips on renting an apartment, condo or house when you travel, see How to Save Money on Vacation Rental Properties. For more information on avoiding travel scams, see How to Avoid Getting Ripped Off While Traveling.
Home-repair scams. When the weather gets warm, homeowners are more likely to get a knock on the door from someone offering to do repair work at a low price. Usually, they'll claim that they've done paving or roofing for someone else in the neighborhood and have extra materials they're willing to unload for cheap, Velasquez says. These traveling repairmen typically aren't licensed and do shoddy work, she says. So when it comes to home improvement, you should always pick the contractor -- don't let them pick you. For more information, see Home Remodeling Done Right.
Ticket scams. Scammers know how pricey tickets to concerts, sporting events and festivals can be, so they try to take advantage of people looking for deals. In particular, they often offer reasonably priced tickets to sold-out events, Velasquez says. They'll take your cash and leave you empty-handed. To avoid paying for tickets that don't exist, Levin of Identity Theft 911 says that you always should purchase tickets through the venue or Web site sanctioned to sell tickets -- not through an unknown third party. For tips on seeing performances and events at discounted prices, check out How to Save Money on Concerts, Sports and More.
Job scams. Scams targeting job hunters pop up in the summer when many high school and college students are looking for temporary work. Many revolve around work-at-home gigs that are advertised on signs along the side of the road, in community papers, on Craigslist and on free online job-listing sites. Often the people or companies offering these opportunities will ask job seekers for a lot of personal information, including Social Security numbers, when they apply, Levin says. Although employers do need this sort of information from new employees, they don't need it during the application process. Too often people are so eager to put themselves in the right light with a prospective employer that they walk right into a trap by providing information that can be used to steal their identities, Levin says. To guard against job scams, do a search online using the company name or phone number and the word "scam" or "complaint." Also check with the Better Business Bureau to see if any complaints have been filed against the company. For legitimate work-at-home positions, consider these 10 options.
How I Tuned Up My Finances in 9 Simple Steps
5 Summer Scams to Avoid
Before launching into review our finances, I kicked off with the same Money Organizer Workbook I have my readers or clients use when reviewing their finances. It broke down steps for me to conquer and review one at a time, and allowed me to see the areas I needed to focus on and where I was good to go.
Creating a plan around your finances without having clearly defined goals in akin to getting into the car to drive somewhere without a destination in mind. There's no room for vagueness. My husband and I had to sit down and determine what we're trying to accomplish (aside from just surviving the change wave that is hitting us). We got detailed and created actionable SMART Goals (Specific, Measurable, Attainable, Relevant and Timely). So, instead of merely saying we'll vacation in Europe, we're now "saving $5,000 for a vacation to Europe next summer."
We all know we're supposed to spend less than we make, but are we? Building a budget is the most important part of getting financially organized. You can't create a plan to meet your goals without knowing where your money is going. Start tracking your spending by paying attention to fixed expenses, debt payments and discretionary (or what I call "fun times") expenses. Pinpoint the areas that are prime for reductions if necessary. In our house, we're willing to cut back on dining out in order to build up our travel fund.
Have you added to or reduced debt since the year began? When it comes to tackling debt, either go after accounts with the highest interest rates first (meaning extra money goes towards this balance only) or use the "snowball" method (targeting lowest balances for payoff first) to build momentum. I have clients and readers use the debt spreadsheet in the Money Organizer Workbook to document creditors, outstanding balances, terms, interest rates and minimum monthly payments and prioritize from there. While we make an effort to pay off our credit cards in full each month, knowing the balances we carry in other debt helps us to understand how much mortgage we can afford when we make the move into a house later this year.
If you didn't start on Jan. 1, there are still six months left to maximize retirement plan contributions. The max contribution for Roth and IRA accounts in 2014 is $5,500 -- $916.67 a month, for the next six months.
The max contribution for your Roth and regular 401(k)s is $17,500. That's $2,916.67 a month for the next six months.
If you haven't been paying attention to your investments, now is the time to check in on allocations and adjust or rebalance to align with your intended strategy. With the market on the move upwards, I took the chance to look at our accounts and the original intended allocation for our funds. With the growth in the market, some funds were out of balance with their intended targets, so I sold and purchased and rebalanced back to target allocations.
You may think "it won't happen to you," but in reality, it could and it might. Having the right kinds of insurance in place for home, auto, life, disability and personal liability is incredibly important. It's even more important to update these numbers as your income fluctuates, your family grows, your career changes, you make large purchases or acquire debt. Many of these numbers are being revamped this month in our household due to my husband's transition to a new job and the adjustments to benefits that we have and need.
Thinking about your death or possible disability is by no means sexy, but it's important. Having the tough conversations and creating documentation for your wishes is a gift of peace of mind for your family. (It's also a good time to tell your spouse who he or she can and can't date if you're no longer around). This is a conversation that my husband and I had a while ago during a road trip, and we have documentation in place, but with family planning on the horizon, it has recently brought up some new questions that we needed to address.
Schedule a check-in for six months from now to track the progress you've made on goals and to review the list of items you've tackled in the previous months. Celebrate your wins along the way. In our house, we have a list of the things we want to purchase (big or small) on the refrigerator. Each time our savings accounts get to a certain amount, we celebrate by allowing ourselves $100 toward one of the items we wanted to purchase. It's a small way to celebrate success and to curb impulse spending.