Nine (9) Ways To Avoid Fraud

Nine (9) Ways To Avoid Fraud
October 10, 2017 Jacob Simon

In this country and around the world fraud is big business. Scam artists, con artists, spammers, and hackers defraud Americans out of millions of dollars each year. These fraudsters use every imaginable tactic (telephone, email, regular mail, social media, and the Internet) to try and separate you from your money.

The following is a list of nine (9) things to do to avoid and stop a scam.

Ways To Avoid Fraud

Rule Number 1: When buying something online make sure you know the seller’s physical address.

Internet phone services and web-based routing technology can make confirming an address a tedious task. But without at least a physical address of the person you are sending money to then you end up assuming all of the risk. If it turns out that your seller is not located in the United States then you will have no recourse at your disposal.

Be sure to read online reviews of experiences that other buyers have had with your seller. You want to buy from sellers like this. Not this.

Rule Number 2: Know that wiring money is like sending cash.

Scammers often insist that people wire money, especially overseas, because it is pretty much impossible trace the transactions, let alone reverse it. Do not wire money to any individual for any reason unless you know them well and trust them completely.

Rule Number 3: Read your monthly account statements.

Personal information is worth its weight in gold. As such, scammers often try to get as much of your personal information as possible and then use what they have to mine for the rest. One way to lose money is to have a scammer run up charges in your name, or have a fake company bill you for bogus “membership fees” or “maintenance fees”. If you see charges that you do not recognize then call your bank or card issuer immediately.

Do not be shy about calling your bank or credit card company if you see movement on your account that you do not recognize. Their only job in this world is to help you (so you feel more at ease, and in turn spend more money, etc.).

Rule Number 4: After a/an [insert type of natural disaster] give only to established charities.

This happens so often that the Federal Trade Commission (“FTC”) has a team dedicated solely to false charities. You can read about how to spot a false charity and how to report it here.

Rule Number 5: Talk to your doctor before buying health product or treatments.

Ask your doctor for any research that supports a product’s claims – and possible risks and side effects. In addition, it is advisable only to purchase prescription drugs from licensed U.S. pharmacies. Yes, I am aware that prices can be cheaper elsewhere in Canada, India, Australia, etc., however, it all comes back to the recourse you have if something goes awry with the sale. In the U.S. you are probably covered. Otherwise, no chance.

Unfortunately, senior citizens are often the targets of scammers selling the latest health/wellness product to increase vitality and extend life. Senior citizens and those caring for an older family member need to keep a especially sharp eye out for products with pie-in-the-sky claims.

Some hilariously tragic examples include:

Rule 6: Investing is never a sure thing.

If someone you do not know contacts you out-of-the-blue with a “low-risk”, “high-return” investment, it is probably best to stay away. Two additional red flags are people who demand that you act immediately, and that you send cash payments.

Report these individuals or companies at

Rule 7: Do not send money to someone you do not know.

This should go without saying. And yet.

Do not send cash, checks, wires, or certified funds to any individual or business unless you know them or are at least familiar with their company. It is also reckless (re: dumb) to send money to someone you do not know unless you at least run their name and/or address through Google. Verifying an entity through Google takes less than five minutes. Simply type into Google the name of the individual or company with terms like “review”, “complaint”, or “scam”. Never pay fees first for the promise of a big pay-off later, whether it is for a loan, or job, a grant, or a prize.

Some of my clients have reported to me that they had received mysterious phone calls from strange numbers where the caller would threaten criminal prosecution if immediate payment was not made. These threats can be very scary, but they are just part of the con. This is America. There is no such thing as debtor’s prison.

Rule 8: Never agree to deposit a check and wire money back.

This is an almost-ancient fraudster technique that still works. Banks are required to make funds from a deposited check available within a few days, but uncovering a fake check often takes weeks. You are responsible for the checks that you deposit. If a check turns out to be fake then you are the one charged with paying back the bank. Take away: Any person who overpays with a check is almost assuredly a scam artist.

The FTC has more information on this con here.

Rule 9: Never play a foreign lottery.

I know, too obvious, right? But they wouldn’t keep doing if it wasn’t working!

It is illegal to play in a foreign lottery. Federal law prohibits mailing payments to buy any ticket, share, or chance in any foreign lottery. The following are some examples of how you or a loved one might come across this particular con.

The FBI has worked hard to crack-down on American’s suffering losses due to foreign lotteries. They have some useful information available here.

Bottom Line: Don’t respond to calls, e-mails, text messages, or letters that tout any foreign lottery.