Since this is National Consumer Protection Week, it seems appropriate to give you a few tips about how to protect yourself from scams. Here are a few things that I’ve told to military audiences that I want you to know about, too:
A lot of scams live online now. Thousands of new scam sites pop up every week. If you think about it, it’s very easy for a scammer to set up a site, then take it down and rename it. And they can be pretty professional-looking sites, too, so you need to be able to recognize the red flags.
Shopping for a used car online? Well, scammers have a real deal for you. They will lift the description and photo of a car for sale off the web, and then advertise it on their own site for a great price, sometimes even promising free shipping. Some scammers will even create a website using the name and address of a legitimate auto dealer! The red flags are: the price is too good to be true; they will find a million reasons why you or your agent can’t come and inspect the car in person; and they will ask you to wire the money to them, up front, before they ship you the car. If you do take the bait and wire them the money, the car will never arrive, you won’t be able to get in touch with them, and your money will be gone for good.
Maybe you’re looking for a job? Well, scammers love job search sites. When you think about it, what are you putting on a job search site? Lots of personal information! And if someone contacts you and says they are thinking of hiring you, you’ll probably give them more information, right? Scammers are finding lots of ways to use these sites, either getting you to pay them to find you a “guaranteed” job, or asking for your banking information once you’re “hired,” or asking you to wire money to guarantee the plane ticket that they are going to send you for your job “interview”. Some will even ask you to pay up front for a background check. To protect your money and your identity, you need to be absolutely sure that you are dealing with a reputable company before you provide any information, let alone money.
Looking for a loan? You should know that the Internet can be a dangerous place to look for a loan. There are thousands of websites that promise you a loan no matter how bad your credit is. The big red flag is when they ask you to send money in advance to secure your loan. They may call this advance fee a security deposit, or insurance, or a collateral payment, but the bottom line is that if they’re asking you to wire money in advance to get a loan, it is a real warning sign of a possible scam. In the scenarios I’m talking about, if you send off your advance fee, you will never see it again, let alone receive the loan you requested.
Buying something online? The seller may suggest using an escrow company to hold the payment until the product is shipped. It sounds like a good way to safeguard your money, but unfortunately a great many online escrow sites are scams, in league with the “seller” to take your money and then disappear. Be sure you only use an escrow site that has a stellar and proven track record (which, by the way, a scammer will never agree to use). You can check out an escrow company’s complaint history at the Better Business Bureau.
I hope that gives you a basic idea of a few of the scams that are out there, and a taste of the financial education tips that we hope to provide from the Office of Servicemember Affairs.