How To Identify A Money Scam

Knowing how to identify a money scam will help you stay on top of your finances. No one wants to find themselves victims of money scams. Luckily for us, there are ways to help identify when a website, email, lottery notification or prize winning is untrustworthy.

1. Check the internet. If you can’t find the company information on the internet, chances are that it is a scam. When you check on the internet, verify the address and phone number associated with the company.
2. Be wary if the email or caller asks for personal information, such as your bank account information, driver’s license, credit card and passport information. If you are uncomfortable giving out this information, then refuse to until you know more about who needs it and why. Request written information verifying the company and the request from you.
3. Think back to determine if you have entered into any contests. If someone notifies you telling you that you have won their prize, but you did not enter any contest under their company’s name, there is a good chance it is fake and a scam to get your money. If you get an email telling you that you have won the lottery, it is a huge red flag, because no lottery organization that is legit will email you to tell you that you have won.
4. Check the email address. If you receive an email and the address is a Yahoo!, Hotmail or another free email account, don’t trust it. Companies and organizations that can afford to hold contests and lotteries can afford to pay for their own email account for their company. It isn’t enough to glance at the email address in the ‘From’ section. Hit ‘Reply’ and see if the same email address is in the ‘To’ line.
5. Stop if you are asked to pay any fees. If you are told that you have won the lottery, and the caller or email tells you there is a “fee,” such as administration fee or for taxes, this is probably a fraud. Lottery winners will have their fees taken out of their winnings, not out of their own pockets.
6. Refuse to travel overseas to collect a prize unless you check out the company or agency with the government of where they want you to go. If the email or caller tells you that you must travel overseas at your own cost to pick up your prize, there is a real good chance that this is just a trick to get your money.
7. Watch out for scams where a ‘business’ needs a person in the U.S. to cash money orders or cashier’s checks. These scams often tell you to cash the payment, keep a percentage of the money (usually 10%) and send the rest to a representative via wire transfer.