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Posted May 7, 2010 | comments Leave a comment

Top 10 frauds and scams: Part 2

In my last blog, I discussed five of the Virginia Attorney General's list of the Top 10 Frauds and Scams. Let's continue with the discussion of the remaining five schemes and suggestions for how to avoid them:

5. Sweepstakes scams involve using contests and prizes to convince you to part with some of your money. Examples are phone calls, postcards, or e-mail messages telling you that you have won or are eligible to win a prize. The catch is that you must pay "insurance," "taxes," or "shipping and handling charges" to receive your gift. Often, the "prize" is worth less than you paid to receive it. Remember that you cannot win a contest that you didn't enter. Companies that hold legitimate contests will not ask you to pay for the prize. They will also not ask you to wire money or send it by overnight delivery. These are red flags that the contest is probably a scam. Also, do not trust the phone number on your caller id to identify where a call is coming from. New technology can make a call appear to come from anywhere (even your own bank or credit card company). So, do not trust the telephone unless you made the call yourself to a number you are sure is legitimate.

4. Identity theft involves another person using your personal information for his or her gain. It can be as simple as using your credit card number to buy something. Or it can be as complex as using your name and social security number to get a job. To avoid identity theft, reduce the amount of personal information you carry in your wallet or purse. Don't carry anything that has your social security number on it. Limit the number of credit/debit cards you carry. Use a credit card, not a debit card, for any transaction where you are not in complete control of the card. For example, use a credit card at a restaurant where the person takes your card away from the table, on the phone, or over the Internet. Credit cards offer you more financial protections than debit cards. If you do not have a credit card, use a pre-paid card instead of a debit card to limit the amount of money at risk. If you would like more detailed information on identity theft, request my identity theft presentation for your group or organization in my service area.

3. Foreign lottery scams involve an offer by phone, mail, or e-mail to participate in a lottery based in another country. Besides being unwise, it is illegal for U.S. residents to participate in foreign lotteries. You will you likely lose the amount you spent on the tickets. Worse yet, if you provide bank account or credit card information to the scammer, you could lose a lot more. Also, your name will probably be placed on a "sucker" list through which you will receive more phony solicitations.

2. Telemarketing scams involve various types of phone pitches designed to con you. Although many telemarketing calls are legitimate, other calls are not. Scammers may try to get you to give them your personal information, give money to a phony charity, invest in a fake investment company, and more. The same guidelines will protect you from any of these types of scams. First, never give out any personal information over the phone unless you made the call to a company you know is legitimate at a phone number you are sure is correct. Second, ask the person to send you written information about the offer or request. Legitimate companies won't mind mailing you information or giving you their website address. Third, check out the company or charity with unbiased sources before you proceed. Click on the links below to visit some review sites:

Finally, reduce the number of telemarketing calls you receive - add your phone number to the national Do Not Call registry. To register online, visit www.donotcall.gov. To register by phone, call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register.

1. Government grant scams say that you have received a government grant that does not have to be repaid. But receiving it will usually involve giving your bank information to have the money deposited or paying a fee. Either way, you lose money rather than receiving any. Remember that you can't receive a grant you did not apply for. Legitimate grants will not ask you to pay a fee for a grant you have received, nor will they ask for your personal information over the phone.

If you would like more information on the "Top 10 Frauds and Scams" visit http://www.vaag.com/CONSUMER/Top_10.html. If your group or organization would like a presentation on this topic in my service area, please contact me at (540) 459-6140.

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