Too Good To Be True: Advance Fee Schemes
Cruising the Internet or the classifieds looking for a bargain, or maybe a new job? Found the deal of the century or maybe the opportunity of a lifetime? Proceed with caution. Using the Internet or classified ads in print, con artists are hoping to take advantage of your situation. That's not to say that you cannot find a good deal or legitimate employment via the Internet or in the paper, but be very wary of the signs of an advance fee scheme.
An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value, such as cash, contracts, gifts or other items, and then receives little or nothing in return. There are many variations, but some common advance fee schemes include:
Sweepstakes Or Lottery Scams
Maybe you've received a phone call, e-mail or letter from someone claiming to be a lottery representative, congratulating you on winning a sweepstakes. What luck! All you have to do is pay for the tax, shipping and processing fees and you will receive your winnings. But once funds are wired, the winner may receive nothing in return except notifications of additional fees necessary to release their "prize". Often in these scams you may be asked for your personal and/or financial information so your winnings may be deposited directly into your account. Once the fraudsters have this information, the results can be financially devastating. An even more dangerous variation is when the "winner" is asked to travel out of the country to claim the lottery winnings in person. These victims can face serious physical harm or worse. It is important to remember two things when it comes to lottery scams: you cannot win a lottery you did not enter, and a legitimate lottery will not require the winner to pay in advance for taxes or other fees.
Fake Job Or Work From Home Scams
Many eager job seekers fall victim to these scams, which can take the form of "Work from Home" scenarios or an unsolicited phony job offer. Both may promise schedule flexibility, attractive benefits, desirable salaries and other perks. In many "Work from Home" scams, the victim is required to send money to cover fees or purchase materials related to performing the job and receive nothing in return, or they find that the work they do is never considered "up to standard" by the employer and they are stuck with the materials and no paycheck.
Online Auction & Classifieds Scams
These sites offer a venue for buyers and sellers to exchange a vast variety of goods. They are also an ideal venue for fraud. Scam artists can advertise anything from cars to pets at incredibly low prices. One scam advertising "pure bred" puppies requires victims to send money to cover fees for shipping and veterinary costs. Victims send money with the promise of receiving "man's best friend", but sadly the puppies never arrive. Sellers must also beware. If a buyer contacts you with an interest in your item, but wants to send you a check or money order for more than the asking price, requesting that you wire back the difference, this should immediately raise your suspicion.
Some Tips To Avoid Advanced Fee Schemes:
- If the offer or opportunity appears too good to be true, it probably is.
- Know who you are dealing with. If you have not heard of the person or company you intend to do business with, learn more. Depending on the amount of money that you intend to spend, you may want to visit the business location, check with the Better Business Bureau, or consult with your financial institution, an attorney or the police.
- Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
- Do not wire funds to anyone you do not know, and never give out your personal and financial information to anyone with whom you have not initiated legitimate business.
If you have been a victim of an advance fee scheme, there may be little you can do to recover your losses, but you can take steps to protect your finances, identity and your credit from further damage. Contact local law enforcement and your financial institutions for assistance and to report the fraud. PSECU members can contact Loss Prevention for more information about advance fee schemes at 717.234.8484 in Harrisburg or 800.237.7328 nationwide. At the menu prompt, select 6, then extension 3111. You can also visit the Federal Trade Commission's Web site at ftc.gov for more information.